Search
Close this search box.

Home of the best experts

Derivatives, News, Regulation, enforcement & litigation
By Gontran de Quillacq
On February 24, 2021

Infinity Q, the new variance swap skeleton?

Infinity Q may be the new variance swap skeleton. The New York hedge fund has just been suspended by the SEC pending valuation of its variance swaps and its full liquidation. The fund's main investor is handling the fund, while the founder is on administrative leave.

Skeleton with a tieThe information is still a bit sketchy, but Infinity Q may be the new variance swap skeleton in the closet.

What we know so far:

  • Infinity Q is a $1.8 bn fund based in NY and incorporated in Delaware, which trades variance swaps. The firm started in May 2014.
  • Its founder is James Velissaris, 36 yo, who worked for Wildcat Capital Management, the family office of billionaire investing titan David Bonderman who founded TPG. Velissaris managed the same strategy in both firms.
  • The firm announced on Monday that the U.S. Securities and Exchange Commission is probing whether Velissaris incorrectly valued complex derivatives. The SEC has approved a request to halt redemptions until the fund is properly valued and the firm liquidated.
  • Leonard Potter is now managing Infinity Q. Mr. Potter is the firm’s non-executive chairman of Infinity Q and the president & CIO of Wildcat Capital Management,.
  • Velissaris is on administrative leave. His LinkedIn profile is deactivated. So is the firm’s website (only the official announcement shows). Velissaris owns 75% of the hedge fund. His attorneys deny any wrongdoing.
  • The firm’s latest fair value is $1.71 bn, with $449 m in swaps (26% of AUM).
  • In June last year, Infinity Q announced a positive performance of 5.63% for 2020Q1, while all the other similar funds had lost money.
  • Texas Municipal Retirement System and State Teachers Retirement System of Ohio are investors of Infinity Q. One of the sub-funds is probably linked to Lincoln Life.
  • U.S. Bancorp is the fund’s admin. EisnerAmper is its accountant.

Our previous note on Malachite, also a NY hedge fund, explained how the fund managed to blow up its entire investors’ AUM $650m on variance swap during the same period of February / March last year.

Credits

Credits to Miles Weiss at Bloomberg for her article below.

Credits to Alicia McElhaney and Leanna Orr at Institutional Investors for their own story Months Before SEC Investigation, Infinity Q’s CIO Touted Strong Performance

One Response

Leave a Reply

Your email address will not be published. Required fields are marked *


News
We would like to express our heartfelt thanks to you, our clients, for your continued and growing business with us.We're also excited to share some...
Derivatives
Investments & markets
The CFTC just fined Goldman for failure to properly disclose prices fairly to clients. And it's all about a technical issue related to the timing of...
Investments & markets
News
Silicon Valley Bank (SVB) defaulted on Friday. At $212 bn of assets, it is the largest failure since 2008, and probably one of the fastest -...
News
The financial industry is a legal and compliance minefield for its million+ members. Through the Financial Professionals Coalition, Stephen Kohn, Bill Singer, and a talented group of...
Investments & markets
News
Xi Jinping's new leadership team will maintain the current direction. And China's GDP will slow; the Chinese economy is unlikely to reach that of the US...
News
Regulation, enforcement & litigation
Johnson & Johnson has spent billions on cases about one of its most popular products - talcum powder. As its executives try a brazen new legal...