Shorting crucial to achieve Russian alpha, say hedgies

Tools for hedging equity exposure became available in Russia in 2006 and 2007, a development that led to international banks setting up derivatives desks there. That meant fund managers could start sourcing put options on stocks and indices. However, with annualised volatility of 50%, it's jolly expensive to short using index options. "We think a Russian fund manager has to hedge to stand a chance of outperformance," said Kevin Doherty, portfolio manager at Pharos Financial Group,…