Ramius [see profile] just launched its second mutual fund. On Wednesday the New York-based Cowen Group subsidiary revealed the Ramius Trading Strategies Managed Futures Fund (RTSIX, RTSRX), after seeding it with about $230 million since soft-launching it last week [see prospectus].
"We are maintaining our commitment to provide new and diverse liquid alternative products," stated Ramius president and CEO Thomas Strauss. "The Ramius Trading Strategies Managed Futures Fund offers investors liquid access to a portfolio of experienced managed futures managers that have been selected through a rigorous due diligence process and trade within a robust managed account structure."
Ramius Trading Strategies president and CEO William Marr and RTS investment research director Alexander Rudin PM the new fund, which includes strategies from Aspect Capital Limited, Cantab Capital Partners, Fulcrum Asset Management, IPM Informed Portfolio Management and Winston Capital Management Limited. Horizon Cash Management sub-advises the fund, with Jill King as PM.
The fund offers A shares for a 550 basis-point up-front load, a 100-bps deferred load, and 453 bps in annual expenses: I shares cost 428 bps in annual expenses. Bingham McCutchen provides counsel; UMB Bank handles custody, co-administration, transfer agency and fund accounting; Tait, Weller & Baker serves as independent accountant; Mutual Fund Administration Corporation is the co-administrator; and Grand Distribution Services handles distribution.
Company Press Release
Cowen Group, Inc. ("Cowen") (NASDAQ: COWN) today announced the formation of the Ramius Trading Strategies Managed Futures Fund ("The Fund") (Ticker: RTSIX, RTSRX). The Fund provides investors access to a portfolio of institutional-caliber managed futures managers in a daily liquidity format utilizing Ramius' proprietary managed account infrastructure, which allows for position level transparency and enhanced risk analytics. The Fund commenced operations on September 13, 2011, and has approximately $230 million in assets under management as of today's release. The Fund is managed by William Marr, President and CEO of Ramius Trading Strategies LLC ("RTS"), and Alexander Rudin, Ph. D., Director of Investment Research of RTS.
Thomas W. Strauss, President and CEO of Ramius LLC, said, "With Ramius' second mutual fund offering, we are maintaining our commitment to provide new and diverse liquid alternative products. These products are designed with the intent of meeting the changing needs of all investors, particularly financial advisors and their clients, many of whom have had limited access to institutional-caliber products in the alternative investment space. The Ramius Trading Strategies Managed Futures Fund offers investors liquid access to a portfolio of experienced managed futures managers that have been selected through a rigorous due diligence process and trade within a robust managed account structure."
William Marr said, "Institutional investors have been increasing their allocations to managers with expertise within the managed futures world because they have historically provided a good source of diversification. We are pleased to now offer this strategy to mass affluent clients seeking to complement their traditional portfolios with an alternatives product offering low minimums, daily liquidity, and 1099 tax reporting."
Prior to his role at RTS, Mr. Marr was the Global Head of Hedge Fund Research & Portfolio Construction at Merrill Lynch from 2006 to 2009, where he oversaw more than $25 billion in hedge fund assets. Previously, he was the Global Head of Alternative Investments for Julius Baer Investment Management from 2002 to 2006 after serving as Senior Vice President and Head of FX Trading and Sales at Bank Julius Baer between 1998 and 2001. Mr. Marr has 24 years of industry experience and has been allocating to hedge funds through managed accounts since 1997.
From 2006 to 2009, Mr. Rudin was Senior Investment Analyst for Merrill Lynch, overseeing more than $4.5 billion in Managed Futures assets. He was also a Director of Quantitative Research for Julius Baer Alternative Investments from 2003 - 2006. Mr. Rudin has 13 years of industry experience plus six years of theoretical physics research.
Ramius, through its affiliates, offers its global institutional client base a broad range of alternative investment programs including hedge funds, real estate debt and equity funds, cash management, a fund of managed accounts platform focusing on trading strategies, and a hedge fund investment and advisory solutions business that includes customized and commingled fund of funds, portfolio completion, portfolio hedging, and hedge fund replication services. Information regarding mutual funds offered by Ramius can be accessed at the following website: www.RamiusMutualFunds.com
RTS was founded in September 2009 and is an affiliate of Cowen Group, Inc. and Ramius Alternative Solutions. RTS offers multi-manager products investing in experienced independent managers in the managed futures and global macro space. All RTS products utilize RTS's managed account platform supported by RTS's proprietary risk and research systems as well as the operational infrastructure of Ramius.
About Cowen Group, Inc.
Cowen Group, Inc. is a leading diversified financial services firm providing alternative investment management, investment banking, research, and sales and trading services through its business units, Ramius and Cowen and Company. Its alternative investment management products include hedge funds, fund of funds, real estate funds, healthcare royalty funds, cash management and commodity trading funds, offered primarily under the Ramius name. Cowen and Company offers industry focused investment banking for growth-oriented companies, domain knowledge-driven research and a sales and trading platform for institutional investors. Founded in 1918, the firm is headquartered in New York and has offices located in major financial centers around the world.
Please consider the Fund's investment objective, risks, charges and expenses before investing. The prospectus, that contains this and other information about the Fund is available free of charge by calling 1.877.672.6487 and should be read carefully prior to investing.
The Fund intends to achieve exposure to the commodity and financial futures markets primarily by investing in the Subsidiary, which, in turn, will invest in the Trading Entities. To qualify for the tax treatment available to regulated investment companies under the Code, the Fund must derive at least 90% of its gross income for each taxable year from sources treated as "qualifying income" under the Code. Income derived from direct investments in commodities is not qualifying income. The Internal Revenue Service (the "IRS") has issued a revenue ruling and private letter rulings. However, these rulings apply only to the taxpayers that requested them and may not be used or cited as precedent. The Fund has not received and does not intend to seek such a ruling from the IRS. Rather, the Fund intends to take the position that income from the Fund's investment in commodity index-linked notes and in the Subsidiary will constitute qualifying income for these purposes, but this tax treatment is not entirely clear. Moreover, the tax treatment of the Fund's investment in commodity index-linked notes or of the Fund's investment in the Subsidiary may be adversely affected by future legislation, Treasury regulations or guidance issued by the IRS. Adverse tax consequences resulting from failure to meet the qualifying income standards could subject the Fund to U.S. federal income tax at regular corporate rates on its taxable income, including its net capital gain, even if distributed to shareholders. Distributions out of earnings and profits would be taxed to shareholders as dividend income. The Advisor may also consider potentially liquidating the Fund.
The investment processes used could fail to achieve the Fund's investment objective and cause your investment to lose value. Accordingly, the Fund should be considered a speculative investment entailing a high degree of risk and is not suitable for all investors. The Fund is new and has a limited history of operations. The use of derivatives can be highly volatile, illiquid and difficult to manage. Derivatives involve greater risks than the underlying obligations because in addition to general market risks, they are subject to illiquidity risk, counterparty risk, credit risk, pricing risk and leveraging risk. The use of derivatives including futures and forward contracts, and ETFs may reduce returns and/or increase volatility. The Fund will invest a percentage of its assets in derivatives, such as futures and options contracts. The use of such derivatives may expose the Fund to additional risks that it would not be subject to if it invested directly in the securities and commodities underlying those derivatives. The Fund may experience losses that exceed losses experienced by funds that do not use futures contracts. There may be an imperfect correlation between the changes in market value of the securities held by the Fund and the prices of futures. Although futures contracts are generally liquid instruments, under certain market conditions there may not always be a liquid ordinary market for a futures contract. As a result, the Fund may be unable to close out its futures contracts at a time which is advantageous. Trading restrictions or limitations may be imposed by an exchange, and government regulations may restrict trading in futures contracts. Over-the-counter transactions are subject to little, if any, regulation and may be subject to the risk of counterparty default. A portion of the Fund's assets may be used to trade OTC commodity interest contracts, such as forward contracts and other commodities or spot contracts. A substantial portion of the trades of the global macro programs, if any, are expected to take place on markets or exchanges outside the United States. Short sales are speculative transactions and involve special risks, including that the fund's losses are potentially unlimited. The Fund may take short positions, directly and indirectly through the Subsidiary, in derivatives. If a derivative in which the Fund has a short position increases in price, the underlying Fund may have to cover its short position at a higher price than the short sale price, resulting in a loss. The Fund is non-diversified meaning it may invest a relatively high percentage of its assets in a limited number of positions making it more vulnerable to changes in the market value of a single position.
Foreign investments present additional risks due to currency fluctuations, economic and political factors, lower liquidity and other factors. The Fund's indirect and direct exposure to foreign currencies subjects the Fund to the risk that those currencies will decline in value relative to the U.S. Dollar, or, in the case of short positions, that the U.S. Dollar will decline in value relative to the currency that the Fund is short. Currency rates in foreign countries may fluctuate significantly over short periods of time for a many reasons, including changes in interest rates and the imposition of currency controls or other political developments in the U.S. or abroad. In addition, the Fund may incur transaction costs in connection with conversions between various currencies.
Some foreign markets present additional risk, because they are not subject to the same degree of regulation as their U.S. counterparts. Trading on foreign exchanges is subject to the risks presented by, among other things, exchange controls, expropriation, increased tax burdens and exposure to local economic declines and political instability. An adverse development with respect to any of these variables could reduce the profit or increase the loss earned on trades in the affected international markets. International trading activities are subject to foreign exchange risk. The Fund may employ leverage and may invest in leveraged instruments. The more the Fund invests in leveraged instruments, the more this leverage will magnify any gains or losses on those investments. The value of your investment in the Fund will likely fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned by the Fund. In general, the market price of debt securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities. Other risk factors include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment by the Fund possibly causing the Fund's share price and total return to be reduced and fluctuate more than other types of investments. To respond to adverse market, economic, political or other conditions, the Fund may invest 100% of its total assets, without limitation, in high-quality short-term debt securities and money market instruments. The Fund's annual portfolio turnover rate may vary greatly from year to year. Frequent trading may result in transaction costs, which could detract from the Fund's performance and potential tax consequences. ETF shares may, at times, trade at a premium or discount to their net asset values and may not replicate exactly the performance of the benchmark index it seeks to track and may involve duplication of advisory fees and certain other expenses. ETNs may be held to maturity, but unlike bonds there are no periodic interest payments and principal is not protected.
The Fund will be indirectly exposed to the risks associated with the Subsidiary's and the Trading Entities' respective investments. The Subsidiary and the Trading Entities are not registered under the 1940 Act and, unless otherwise noted in this Prospectus, are not subject to all of the investor protections of the 1940 Act. Changes in the laws of the United States, the U.S. states or the Cayman Islands, under which the Fund, the Trading Entities and the Subsidiary are organized and operated, as applicable, could prevent the Fund, the Subsidiary or the Trading Entities from operating as described in this Prospectus and could negatively affect the Fund and its shareholders. In addition, the Cayman Islands currently does not impose any income, corporate, capital gain or withholding taxes on the Subsidiary. If this were to change and the Subsidiary were required to pay Cayman Island taxes, the investment returns of the Fund would be adversely affected. The Subsidiary concentrates its investments in the commodity futures markets, which have historically experienced substantial price volatility. This concentration subjects the Fund to greater risk of loss as a result of adverse economic, business or other developments than if the Subsidiary's investments were diversified across different sectors and markets. The performance-based fees paid to the Trading Advisors may create an incentive for the Trading Advisors to make investments that are riskier or more speculative than those they might have made in the absence of such performance-based fees. A Trading Advisor with positive performance may receive performance-based compensation from the Trading Entity, which will be borne indirectly by the Fund, even if the Fund's overall returns are negative.
Ramius Trading Strategies Managed Futures Fund is distributed by Grand Distribution Services, LLC.