04.21.2014
By Terry Flanagan

Red Rock Capital’s Commodity Long-Short Investment Program Up +27%

As industry giants struggle and exit the global commodities space, Red Rock Capital’s new program prevails

CHICAGO, Illinois, April 22, 2014 – Last September, Red Rock Capital Chief Investment Officer Thomas Rollinger, protégé of quant hedge fund “godfather” Edward O. Thorp, and his firm launched a new Commodity Long-Short investment program. During a challenging period that saw both J.P. Morgan and Deutsche Bank quit the global commodities trading business, Rollinger’s new strategy is up 27.47% over the first seven months since inception.

“Physical commodity futures are more susceptible to supply and demand shocks than are financial futures”, Rollinger said. “While most Commodity Trading Advisors (CTAs) were waiting for clear global trends to develop across interest rate and currency markets, we were successfully exploiting inefficiencies that clearly manifested themselves in physical commodities markets – which explains our outperformance verses our peers.”

Red Rock Capital’s Commodity Long-Short program implements “long” or “short” outright directional positions on a universe of 20 diversified physical commodity futures across the agricultural, energies, base metals, precious metals, and softs sectors.
Rollinger added, “As Morningstar clearly conveyed in a 2009 paper, ‘Due to the mechanics of futures markets, Long-only commodity future strategies can prove inadequate…[therefore] a Long-Short approach is logically consistent with the underlying economics of commodities futures markets.’”

“Based on our research we agree with Morningstar on these points, and we consider the Morningstar Commodity Long/Short Index to be a fitting benchmark upon which to measure us.”

So far Red Rock’s Commodity Long-Short program has not had a losing month, however, Rollinger concedes they went live at an opportune time – and says that they expect to have losing months mixed into their performance in the future given enough time.

“My aim with this strategy is for it to be world-class. So far we are pleased with the performance, and it appears to be a good diversifier as its correlation to both CTA indexes and traditional investments such as stocks & bonds has been very low.”

ABOUT RED ROCK CAPITAL –– Red Rock Capital is an award-winning Commodity Trading Advisor (CTA) located on Chicago’s Magnificent Mile.

For more information about Red Rock Capital visit www.redrockcapital.com or contact Thomas Rollinger, Managing Partner at (949) 648-9506 or trollinger@redrockcapital.com.

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