Hedge Funds Performance

Performance profile: Volatility lifts Capstone


In an environment that has sent many hedge fund firms over the edge, Capstone Investment Advisors is profiting from the huge dislocations.

The $1 billion Capstone Volatility Master fund, which was launched in August 2007, is up 6.58% this year through August, after having finished last year with a five-month gain of 19.44%. The strategy uses quantitative models to identify investment opportunities in equities, fixed income and commodities, but it does not rely on a black-box approach to make trading decisions.

With no lack of volatility in the current market, Paul Britton, Capstone's chief executive and chief operating officer,