The Mint Tower Arbitrage Fund is an investment fund with a focus on Convertible and Volatility Arbitrage. These are market-neutral strategies which earn money from the volatility of financial instruments and not just from the direction of these instruments. The unique combination of these strategies makes it possible to generate a positive return in both rising and declining markets, as demonstrated under ‘our results’.
This is a market-neutral strategy. The methodology is primarily a combination of transactions that involve buying a bond that can be converted into shares (convertible) and selling (short sale) the underlying shares. The manager uses proprietary systems and methodologies to select undervalued convertibles. The manager then manages its positions with the aid of proven theoretical models.
This strategy allows inefficiencies in the equity and equity index option markets to be capitalised on. Arbitrage opportunities may arise between different strikes and maturities for options on the same underlying share/index. Differences in volatility between underlying shares and their respective indices can also be arbitraged through dispersion strategies.