Chicago-based futures brokerage and clearer R.J. O’Brien said managed futures sector specialist Julie DeMatteo has been hired to lead RJO’s asset-management team in product creation and distribution.
RJO Chief Executive Gerald Corcoran said DeMatteo will leverage a strong managed futures offering and infrastructure, and focus on establishing new specialized products for both institutional and accredited investors.
“RJO is a formidable competitor in the futures brokerage industry,” DeMatteo told Markets Media. “It only makes sense to leverage the firm’s world class operational and risk-management infrastructure to further expand the asset management division.”
DeMatteo, previously at Barclays Capital, said she was attracted by the operational and risk management infrastructure that RJO has had in place for five years, noting that it was stress-tested when RJO took over some 20,000 clients when MF Global went bankrupt in late 2011.
Others ranked similarly in the Futures Commission Merchant space are mostly banks, facing different capital requirements hurdles and cost structure hurdles to trading activities, she noted.
RJO will target pensions, endowments, funds of funds, banks, family offices, investment advisors and others to increase its market share in structured products, but DeMatteo said a defining opportunity for RJO is the foundation already in place. “We expect to partner with a variety of investment managers and distribution agents to broaden the product offering,” she said.
The accredited investor market is typically the last step in the distribution model for most CTAs and alternative investment managers. In contrast, RJO’s fully-built-out infrastructure lends itself to creating more products based on futures trading strategies, she said.
Retail asset allocation to alternative-like strategies such as commodities, long-short products and market-neutral strategies has grown by 21% annually since 2005, and the market size is currently about $700 billion – approximately 6% of total U.S. long-term 40 Act retail assets. Strong demand for experienced hedge fund allocators is expected to continue underpinning that growth trajectory, as will the pending implementation of the Jobs Act, according to some market participants.
