Capula Investment Management has inaugurated a quantitative commodities trading advisor strategy under the leadership of Yao Hua Ooi, a trader who previously worked at AQR Capital Management, people familiar with the matter told reporters.
Ooi was instrumental at AQR in building a systematic trading program that grew to $6.3 billion in size, and he was a member of the team that launched and operated the Helix fund. Those credentials underpin Capula's decision to bring him on to run the new effort.
The newly created vehicle, named the Capula Alternative Markets Alpha Fund, carries capacity to accept between $2 billion and $3 billion of investor capital, according to the people. Capula is actively engaged in talks with prospective investors as it works to raise capital for the strategy.
Observers see the launch as part of Capula's broader push to diversify its business beyond the firm's established relative-value activities. Capula's core approach has concentrated on relative-value trading across bonds, currencies and other instruments. The new fund marks an expansion into a systematic commodities trading domain.
Capula was co-founded in 2005 by Yan Huo. Prior to starting the London-based hedge fund, Huo built JPMorgan Chase & Co.'s fixed-income proprietary trading team. That background is part of the firm's institutional pedigree cited in connection with the new initiative.
Summary of developments:
- Capula has launched a quantitative CTA strategy led by Yao Hua Ooi, a former AQR trader.
- The Capula Alternative Markets Alpha Fund has capacity for $2 billion to $3 billion and is currently in discussions with investors.
- The move expands Capula's product set beyond its long-standing relative-value trading business in bonds, currencies and other assets.
While the new strategy draws on Ooi's experience building a $6.3 billion systematic program at AQR and his role on the Helix fund team, details on the fund's investment process, timeline for raising capital, and the specific commodities or systematic models to be employed have not been provided by the people cited.
Capula's founding in 2005 and Yan Huo's prior role establishing JPMorgan's fixed-income proprietary trading desk are noted as part of the firm's history, but the reporting does not elaborate further on how that history will influence the new CTA strategy's operations.