Last Week Marquette Students Learned About Arbitrage-Based Hedge Funds from Chris McGuire of Phalanx Capital Management
|Chris McGuire of Phalanx Capital Management|
Phalanx Capital Management, a Chicago-based Asian Volatility Multi-Strategy Hedge Fund, was founded in 2004 by Chris McGuire (a 1991 Marquette University alumnus).
Dr. David Krause, AIM program director said, “The Phalanx fund has received numerous awards over the years and is considered to be one of the more creative (and non-correlated) hedge funds in existence. Chris McGuire has helped Phalanx investors receive positive year-over-year returns in 11 out of 12 years since the fund was founded.”
Chris McGuire told the AIM students – and those in the Alternative Investments class - that Phalanx pioneered the enhancement of traditional convertible bond arbitrage with volatility and credit strategies.
Dr. Krause said, "Chris did an excellent job explaining how Phalanx gains its exposure through the buying of cheap or mispriced options in Japanese and other Asian firms. He noted that they deliver “alpha” through three main strategies: convertible bond arbitrage, volatility arbitrage, and equity opportunistic strategies."
|Dr. David Krause, Chris McGuire and Dan Farrell|
Chris McGuire was joined by Dan Farrell, Phalanx’s director of investor relations. Chris talked about his various experiences since graduating from Marquette – including time spent in London and Tokyo. He explained why their investment focus is on Japan and how they are able to exploit unique structural inefficiencies that do not exist in the rest of the world. The students were interested to learn about the firm’s use of asset swaps, convertible bonds and options. Dan talked about his background and how Phalanx seeks the right expectations match with their investors.
Dr. David Krause stated, “It was great to have Chris and Dan address the students. Also we really appreciated them taking the time to meet with small groups of students after their presentation. With Chris having two decades of experience in trading international options and convertibles, it is clear that Phalanx provides the experience and analytical skills to identify pricing anomalies in the convertible bond and volatility markets. It was very interesting and we’re thankful they again visited us for a day.”