Joe Reynoso, principal of Reynoso Asset Management (RAM) and the investment manager for the Reynoso Options Arbitrage Fund, says the institutional world is scared by triple-digit returns. "If you're earning 100% or more per year, they're assuming correctly that you're taking significant risks, which they may not want to pass on to their clients. In the long run, it's better for us to be gaining a nice double-digit return on a much larger pie than a triple-digit return on a smaller pie," Reynoso says. This is one of the goals RAM tries to achieve by trading S&P option spreads. In 1997 Reynoso teamed up with Randy Hanebutt, a principal at RAM, who Reynoso met at the University of Chicago Graduate School of Business. Their options program has earned 15.47% in 2004, and it had a return of 16.62% in 2003. The largest drawdown was 9.5% in the summer of 2002. They now have $50 million under management.
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