MF Global Ltd., a New York commodity futures brokerage company, has announced the introduction of a managed futures division that will follow commodity trends.
The company's alternative investment strategies division, which opened Tuesday, also plans to enter the fund management business. Adam Rochlin, the new division's head, said in an interview that the company would target institutional investors.
He said that he sees an opportunity to gain $15 billion of assets in the next five years by offering managed futures.
"I think that is a fairly conservative estimate," he said. "We absolutely believe that we can generate a 10% to 15% share of this market as we introduce products and develop distribution."
Commodity trading advisers who sold managed futures grew an average of 14% last year, and some individual funds gained as much as 60% by buying oil, metals, grains and equities as they rose and selling them as they fell.
Rochlin said there is no "clear set of well-established competitors" in this market. "Things are still very fractured on the manufacturing side," he said. "There are a lot of small shops, but we think there is a yawning gap that needs to be filled."
MF Global has a managed futures sales force in the United States and Asia and is developing a team in Europe.