Just when they thought they were out, it pulled them back in:
After deserting commodities markets during last year’s slide, some hedge funds are starting to move back in, betting a recent pick-up in energy prices could signal a turning point…“A lot of investors are starting to realize that the current oil price is not sustainable and we have to move higher.”
Hedge fund LP’s also seem to be getting in on the act. According to Reuters, a Barclays survey published in February showed that cash intended for commodity funds were on track to rise 5% this year, while eVestment data show that money plowed into these type of funds climbed at an increasing rate since September 2015, eventually reaching a near two-year high of $1.22 billion in January.
Despite this trend however, only two brave souls have so far decided to launch commodity funds this year:
Two new commodity funds have launched in the first 60 days of 2016, compared with just five launches and 17 fund closures in 2015, data from Preqin showed.
The first – $110 million Kimura Capital – will fund the transportation of commodities, while the second – Westbeck Capital Management, formerly Westbrook Asset Management, – hopes to generate returns through bets on small and mid-sized oil companies.
Photo: Ian Burt