Mariner Coria: the changing face of arbitrage

Fund manager exploits mispricings linked to structured products and derivatives end-user flows

Jon Loflin (left) and Benn Eifert

A few months ago, the investment team at Mariner Coria began receiving calls from dealers eager to offload correlation risk between the euro/US dollar exchange rate and the Euro Stoxx 50 index.

Dealers accumulated the exposure as US retail investors piled into currency-hedged exchange-traded funds (ETFs) and structured notes referencing European equities – with one such ETF offered by WisdomTree Investments drawing nearly $16 billion of inflows since the start of this year.

The flows left dealer

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