The Gargoyle Group, an options-trading hedge fund manager and one of the largest privately-owned equity options trading firms in the United States, has selected Geneva-based alternative assets marketing firm MCAM Group to raise capital for Gargoyle Hedged Value Fund in Europe and Asia.
Established in January 2000, the USD210 million Fund seeks to produce superior long-term investment returns versus the S&P 500 with significantly lower volatility via a long/short, options-enhanced strategy. The long portfolio employs Gargoyle’s proprietary metrics to select undervalued stocks from among the 1000 most highly capitalised US-listed companies. The long-only stock portfolio is complemented by a highly-correlated short portfolio of relatively overpriced near-term call options on a blend of equity indices.
Since inception, the strategy has widely outperformed the S&P 500 in 10 out of 11 years and delivered a cumulative net return of 145.20% versus 7.09% for the S&P 500.
According to the fund’s co-founders, Josh Parker and Alan Salzbank, Gargoyle Hedge Value Fund’s performance has benefited largely from three drivers– the manager’s ability to select undervalued stocks of healthy companies; the ability of the Fund to capture, over the long term, nearly 99% of market gains while enduring less than 50% of market losses; and the manager’s real-time dynamic management of the short portfolio of index options to maintain a somewhat constant hedge.
“To our knowledge, The Gargoyle Group’s practice of actively managing an index options-based short portfolio on a day-to-day basis – rather than on a passive, monthly basis – is unique among hedge funds,” says Parker.
“MCAM Group has the capability to introduce our proven strategy to a wide cross-section of international investors and should have a meaningful impact on our ability to raise capital overseas,” says Gargoyle Group cofounders Charles Goodgal and Bruce Rogoff.
Lars Bjoergerd, Managing Director, MCAM Group adds: “We are excited about working with the experienced investment professionals at The Gargoyle Group. The firm is widely recognised as a leading private options firm in the US and has an excellent reputation as one of the foremost practitioners of sophisticated options strategies to hedge equities. “