Swedish multi-strategy boutique Tidan Capital has launched a UCITS version of its NOVA volatility arbitrage strategy, broadening access to the strategy among institutional investors. The UCITS fund launched on July 31, following the launch of the original NOVA fund in late 2024, and has already attracted more than $100 million from seed investors. Led by Magnus Linder, Head of Volatility and Options Arbitrage at Tidan Capital, the strategy managed $360 million as of the end of August.

Targeting structural inefficiencies in volatility markets

The UCITS launch comes as institutional investors continue to seek alternative return streams that are less dependent on traditional equity and bond markets. Volatility strategies have attracted growing attention in this context, offering the potential for diversification and different sources of returns across market environments.

NOVA seeks to capture pricing inefficiencies across listed derivatives markets through a market-neutral volatility arbitrage approach. The strategy is built around the observation that persistent institutional demand for downside protection can create recurring dislocations in options markets. Tidan’s NOVA strategy seeks to exploit these through active options portfolio construction and dynamic hedging, while limiting exposure to broader market direction.

Combining convexity and carry

While volatility investing has become an established part of the alternative investment universe, the team at Tidan believes there remains scope for differentiated approaches within the segment. Its analysis of the global volatility arbitrage universe identified a large and mature peer group managing several billion dollars across dedicated volatility strategies. However, Tidan found relatively few approaches seeking to combine long convexity, positive carry and limited directional market exposure within a single portfolio.

“The volatility market is unusually rich in structural buyers and sellers with very different objectives. That creates recurring pricing dislocations that are difficult to arbitrage away completely.”

Magnus Linder, Head of Volatility and Options Arbitrage at Tidan Capital.

For Magnus Linder, Portfolio Manager of NOVA, that combination is central to NOVA’s investment philosophy. “The volatility market is unusually rich in structural buyers and sellers with very different objectives. That creates recurring pricing dislocations that are difficult to arbitrage away completely,” explains Linder. “NOVA was designed to systematically capture those inefficiencies while maintaining a portfolio profile characterised by long convexity, positive carry and low market beta. We believe that profile can play a valuable role alongside both traditional and alternative investments.”

Expanding access through UCITS

The UCITS structure is intended to make the strategy accessible to a broader institutional investor base while retaining the core investment approach of the original NOVA fund. The strong initial demand has resulted in more than $100 million in seed capital since the fund’s July launch, while assets across the overall NOVA strategy reached $360 million at the end of August.

The fund has been launched on the Alma platform, following a detailed review of the global volatility arbitrage universe as part of the product development process. Beyond providing the UCITS infrastructure, Tidan selected Alma for its specialist focus, product approach and track record of working with independent asset managers. The partnership is intended to support the next stage of NOVA’s development as Tidan expands the strategy’s availability to institutional investors.