14/08/2002

Ex-Barclays Global Investors Research Head Opens Hedge Fund

London, Aug. 14 (Bloomberg) -- Ed Boscott, former head of European equity research at Barclays Global Investors, has started a hedge fund that buys and sells stocks in the region.

The OCIM Market Neutral Equity fund, which picks shares using a computer model based on the one Boscott helped develop at BGI, is expected to return 12 percent to 15 percent a year, he said in an interview.

Hedge funds are mutual funds designed for the wealthy and institutions that try to profit from falling as well as rising prices. Boscott’s new fund balances buy and sell orders to even out equity market gyrations. It gained 1.4 percent in July, the first month the computer model was fully operating, Boscott said. That compares with a 10 percent slump in the Dow Jones Stoxx 50 index of leading European companies.

“We opened in an almost ideal environment for us”, said Boscott, who spent six years at BGI, the world’s No. 2 manager of money for institutional investors, before leaving in April 2000. “The computer system was selling through most of July as the market fell.”

While at BGI, Boscott said he helped develop a computer system that was used to manage about $25 billion in assets. Since leaving BGI, he’s added 50 percent more applications to the system, altering it to manage his new fund, he said.

BGI developed the original computer model for use in managing its U.K. Equity Market Neutral fund, the company’s first European hedge fund which opened in October 2000. That fund has returned 14 percent a year since inception to the end of July.

Coronation International Ltd, a South-African-owned money manager with $1.4 billion in hedge-fund assets, provided the first $10 million for Boscott’s fund, he said.

Oxford & Cambridge Investment Management Ltd, the hedge-fund company set up in 2000 by Boscott and his wife Rebecca, was backed by London-based venture capital company The Summit Group Ltd. Boscott declined to say how much Summit invested. The minimum investment is $100,000.

He wants to increase assets under management and hire more staff including possibly other fund managers looking to start their own hedge funds from within an established company.

“One of the things we’re considering is bringing in new managers who want to open new funds,” said Boscott. “ This would be a way of sharing costs and resources.”

Alistair Barr at Bloomberg

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