KEY POINTS:
While investment firms are bracing themselves after sharemarket falls one company has taken the bold step of launching a new fund.
Goldman Henry Capital Management, which specialises in investing in the US markets, has put together an unlisted vehicle with the ability to invest in any number of US listed shares, US bonds, options or cash.
The Midas fund is the third launched by the small Auckland-based firm. Its first fund, the US 50 fund, went to the market in July 2004 followed by the launch of the GH Emerging Markets fund in May last year.
It's a bold move in the current market but the directors and key partners behind the business, Alan Goldman and Brian Henry, are no strangers to adversity.
Henry, a barrister, is well known for his legal work, including representing Winston Peters in the winebox inquiry.
Analyst Alan Goldman is not well known in this country but has an unusual past. Born in South Africa his father was the mayor of Durban.
Later he moved to Hamburg and Singapore where his family had a business. He came to New Zealand in 1998 and worked with a nephew which then landed him in hot water over a boiler room scheme. (Boiler room schemes involve people cold calling investors and selling them shares that turn out not to be worth very much.)
Goldman was trying to help investors get rid of the shares but ended up being fined in Australia for giving advice without a licence.
The blemish on Goldman's career is something both he and Henry have had to deal with in setting up shop together but Henry's faith in Goldman's investment process is such that the pair have pushed on.
It is the same dogged determination that has seen the pair launch Midas at a time when US markets have been highly volatile.
"There is a a lot of pain at present but we see it as a symptom of a recovering market," Goldman said.
"No one has a crystal ball. It's too hard to look for the bottom of the market but I know when it is low, as it is right now."
He sees recent interest rate cuts by the Federal Reserve as a positive move and says keeping the economy out of recession is very much a focus for politicians.
Unlike the long-term approach of the US 50 fund the Midas fund operates from quarter to quarter and aims to provide an income.
Any investment growth in the portfolio is paid out in a dividend or can be reinvested. In the five audited quarters when it traded before opening to public investment at the end of January, Goldman says, the returns varied from 17 per cent to 1.2 per cent per quarter.
The firm's website shows it was down 18 per cent for the last quarter.
It can invest in any number of companies but currently has around 15 stocks in the portfolio making it fairly concentrated and at the higher risk end of the spectrum.
Like other fund managers Goldman does not like to disclose what level of holding he has in a company but the exact companies he chooses are available online.
