Artradis eyes profits from gloomy markets

By Saeed Azhar

SINGAPORE (Reuters) - Artradis Fund Management, a Singapore-based $1 billion hedge fund, makes money when markets are volatile and gloomy, meaning the last five years have been tough as stock prices have ballooned.

"Markets have trended higher in the wonderful liquidity-driven bull market for the last five years, which is just about the worst possible environment for volatility," said Julian Ings-Chambers, who helps manage funds which are long on volatility and neutral on markets.

"We have been operating in a bear market for volatility in the last five years," he told the Reuters Hedge Funds and Private Equity Summit in Singapore.

But Ings-Chambers said the funds still managed to make money during bouts of correction in Asian markets, such as the downturn in June last year and the sell-off earlier this year.

"Our best month in 2006 was in June. Everybody else's worst month was in June," he said, adding that Artradis funds aim to be long on volatility when events happen.

"As long as you are long on volatility you will make money."

Artradis' Barracuda fund has $850 million in assets and invests in Asian equities, especially large liquid markets such as Japan, Hong Kong and South Korea.

The fund has managed to garner 6.5 percent compound yearly return since launching in 2002.  Continued...