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Harvesting value from volatility

Muhr: now harvesting options
volatility on CSFB's farm

Karlheinz Muhr is full of colourful ways to describe his business. He is chairman and founding partner of Volaris Advisors, which dubs itself an equity-options strategy firm. Essentially what it offers is the ability, as Muhr puts it, "to harvest the volatility of stocks which you already own".


His firm is at the forefront of putting volatility on the map as an asset class. "If you ask people whether volatility is good or bad, a liability or an asset, chances are that 90% of them will tell you it's a liability and it's bad," he says. "But it can be treated as an asset if you own the stock."

So this isn't about short selling, nor is it about playing the market. It's about getting some extra return, or a "synthetic dividend", as Muhr puts it, from something that you already own.

Most of his clients - he has around $1.5 billion of assets under management after just 18 months in full-time operation - are high-net-worth individuals, trusts or foundations, although he does have some money managers and even a couple of hedge funds on the books.


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