Orbitex Financial Services Group has formed an alternative strategies division to market hedge fund-based products in the U.S. and abroad. Orbitex Alternative Strategies (OAS) has been targeting high-net-worth and small institutional clients in foreign markets for the past eight months and has just now introduced its alternative strategies in the U.S.
Rather than investing directly in hedge funds, OAS creates separate investment vehicles that invest in hedge funds, as a way of offering liquidity to investors. These products also offer guarantee of principal. "In general, [hedge] funds have been subject to risk of principal loss, very little regulation and little or no transparency to the buyer," said David Henritze Jr., managing director of OAS.