FERI expands range of liquid alternative investments

The Bad Homburg-based multi-asset investment house FERI is further expanding its offering in the area of liquid alternative investments. "In view of the structurally changed interest rate environment and the sustained return of volatility in the global financial markets, we have decided to further develop and expand our range of liquid alternative investment strategies for our investors," explains Dr. Marcel V. Lähn, Chief Investment Officer at FERI. In addition to liquid hedge fund strategies, this primarily concerns the volatility funds of the Flex family, he said. "With the OptoFlex strategy, we developed an innovative solution for collecting volatility premiums for our customers more than ten years ago," emphasizes Carsten Hermann, Managing Director of FERI Trust GmbH and already responsible for the FERI volatility concepts as Head of Investment Management since 2012. The extremely successful and multiple award-winning concept of OptoFlex had set new standards in the field of alternative investments for professional investors over the past years, because it enabled attractive returns beyond the classic bond and equity strategies in the low-interest environment and thus contributed significantly to the stabilization of portfolios.

Positive return outlook

"In the environment of increased interest rates, institutional investors are now once again turning more to classic fixed-income products. As a result, classic volatility strategies as pure interest rate substitute products are no longer as much in focus," Hermann explains. At the same time, the prospects are still very attractive: "The interest rate turnaround has also significantly increased the base yield level for the OptoFlex strategy - moreover, the current market conditions with high volatility premiums again allow the realization of attractive excess returns," Hermann emphasizes.

FERI will integrate liquid hedge funds as well as its in-house volatility concepts even more strongly into the investment house's holistic multi-asset approach in the future. "The equity market as an underlying will assume greater importance in our alternative asset strategies in the future, but also the hedge fund area as a whole," Lähn said. He also said the company wants to open up access to the concepts to broader investor groups.

Volatility as an asset class in its own right

Following the great success of OptoFlex and EquityFlex, both systematic and rule-based option premium strategies based on the U.S. equity market, the investment approach was expanded to include the European equity market as early as 2021 with EuroEquityFlex. The volume of all volatility strategies managed by FERI currently exceeds 3 billion euros. In view of the strategic growth prospects, the portfolio management of these concepts will be adapted and broadened, and the associated risk management will be optimized at the same time. "For us, volatility is a separate liquid alternative asset class that benefits from market fluctuations. Corresponding strategies will therefore continue to be indispensable in the portfolio context of both institutional and private investors and for this reason are an elementary component of our multi-asset investment approach," says Dr. Marcel V. Lähn.