From Sex Scandal To The Launch of a $2bn Macro Fund

Recent news reports have stated that the former French Presidential contender, Dominique Strauss-Kahn, is starting a $2 billion hedge fund. This will be his first venture since the sex scandal that killed his chances of being a political world leader. The fund, DSK Global Investments, stands to do well with his knowledge of international commerce along with his vast network of political connections. The initial marketing was done in China. When it hits its mark of raising $2 billion, it will be one of the largest launches in Europe since the economic crisis in 2008.

According to the COO of LSK & Partners, who is partnering with Strauss-Kahn, there is a lot of enthusiasm from clients to be a part of the new opportunity, which will take the form of a “global macro fund,” involving a hedge strategy focusing on the direction of various economies including interest rates and currency exchanges, requiring an exceptional amount of skill and some tolerance toward market fluctuations. The expertise will come mostly for Strauss-Kahn, who will be taking note of major and minor events in the world market, and how their effects will be felt.

More than anything else, the fund will focus on emerging markets, which will bring in many investments funds in Asia, as well as from wealthy individuals . One of the most interesting aspects of this launch is not merely the impact it will have for investors, but also for investment professionals. In recent years, European funds have had trouble meeting their fundraising targets, but if the $2 billion is raised, it could create a trend that will reverse the tide of trepidation in this market.

This, however, might not be such a paradigm shift given that fact that many newer funds in the United States are getting into the Eurpoean market, most notably by Alex Duran of Permian Investment Partners, a New York City-based fund that seems to operate with a new approach to using old wisdom. According to sources, the fund will be hedging itself as well as its investment money by not using debt to “go big” on its bets. The fee structure is currently unknown because they are still awaiting regulatory approval, but speculation leads some to figure the “two and twenty” approach will be used, meaning that a 2% annual fee will be collected along with 20% of profits. The fund will be based in Geneva and among its leadership will be Strauss-Kahn’s daughter, who will be doing research work.


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