Christian Baha, principal and founder of the Superfund Group of companies, is on a crusade to bring managed futures investment into the mainstream. And although progress on that has been slow, he points out “every [investment] that was restricted eventually moved to retail.”
He has certainly acted like a mainstream investment manager. His U.S. funds, which are registered public commodity pools, are offered to retail investors for a $5,000 minimum. He has promoted his funds in television ads in Europe and the United States and through sports sponsorships. He also has opened an investment center in New York and has plans to open other centers in Chicago and California. The move has a precedent; Baha points out that Charles Merrill opened a storefront operation to sell stocks to retail investors at a time when stocks were not thought of as legitimate retail investments.
While other commodity trading advisors offer retail products, Baha points out they all market through large wire houses, not directly to investors.
“I am proud being a managed futures fund. This asset class is one of the best and should be in every portfolio,” Baha says, adding, “Managed futures has the lowest correlation to any other asset class.”
Baha is not without critics who cite high fees and the fact that he acts as the broker to his funds. Baha notes that his performance justifies those fees and that all fees are fully disclosed.
Baha says managed futures will eventually move into the mainstream. “This will happen. Managed futures will be treated the same as mutual funds.”
And he is not just blowing his own horn. Baha is a fan of the sector and has expressed an interest in duplicating his retail structure for other successful commodity trading advisors (CTA).
Hedge fund administrators are designed to handle the business end of hedge funds so fund managers can concentrate on trading. They typically provide administrative services to equity-based hedge funds and have often dismissed futures funds. Despite superior transparency and liquidity, futures funds often are seen as less legitimate.
International Financial Administration (IFA), a 10-year old British Virgin Islands-based fund administrator, is trying to change that and has expanded its global operation to Chicago and is targeting emerging futures managers. IFA Principal Derek M. Adler says some administrators simply do not want futures managers but adds, “futures is where the small talent emerges.”
IFA Managing member Tom Pearson says, “Our fee structure is designed to assist emerging managers who typically have less money under management.”