State St to launch FX fund in fourth quarter

"We are now creating a currency fund, with fixed income and managed futures funds to follow next year," said Chris Woods, who moved over from his role as UK chief investment officer in June to head SSgA’s hedge fund business.

SSgA has run a currency overlay strategy for several years. It first began using currency as a source of absolute returns for two clients earlier this year, said Woods. The new FX fund will be run using a systematic trading approach, but there will also be some discretionary management where currency movements reach extremes, he said. As a result there will not be a single manager responsible for the currency fund but a team reporting to Woods and Paul Duncombe, head of the currency management group at SSgA in London.

SSgA’s hedge fund strategies group, which was launched earlier this month, is designed to capitalise on the current demand for alternative investments.

SSgA clients are currently able to access fund of funds offerings through SSARIS Advisors, a member of State Street Global Alliance, which aggregates several external hedge funds. State Street Global Alliance is a joint venture between SSgA and Dutch pension fund Stichting Pensioenfonds ABP, comprising early stage investment companies that complement SSgA investment capabilities. Woods said that once the fixed-income and managed futures funds are launched next year, he plans to offer internal hedge fund of funds products to clients.

Woods currently oversees a team of five on the investment side and four in marketing across offices in Boston, London, Hong Kong, Japan and Sydney. He expects the investment team to at least double as the new funds are launched.