Oceanic to tap into the boom in global commodity prices

By Daniel Thomas

Published: October 1 2007 03:00 | Last updated: October 1 2007 03:00

Boutique fund manager Oceanic Asset Management is to launch a stable of investment funds to tap into booming global commodity prices.

Australia-based Oceanic is hoping to attract UK retail and institutional investors to the funds, which will include a £350m global commodities equities fund to be domiciled in the UK and an offshore commodities hedge fund.

With resources such as oil and gold trading at all-time highs, the company believes that investors want greater choice in a relatively niche part of the fund management market.

"The reality is that there are still few options for investors interested in gaining access to commodities through a fund," said John Fearon, director at Oceanic. "The thirst for some exposure to commodities markets is growing all the time."

There will be concerns, however, among more cautious investors that certain commodity prices are reaching a cyclical peak.

The Oceanic global equity fund will be launched in the first week of November.

The fund will look to hedge some of the volatility in the commodities market by using derivatives.

Oceanic will also launch a similar Luxembourgbased fund for the European market.

The company also plans an energy equities fund for the UK, which will invest in companies producing alternative sources of energy, as well as uranium and more conventional options.

This year, Oceanic will launch a Cayman Islands hedge fund, although the date has been delayed owing to turbulence in the hedge fund market. It is hoped to grow to US$500m (£245m). UBS acts as prime broker for the fund.

Oceanic will also create a closed-ended investment fund in Australia that will specialise in uranium stocks.

Oceanic has so far launched only one fund, the Australian Natural Re-sources Fund, which invests in small-cap Australian companies.

The commodity fund sector is dominated by Merrill Lynch and JPMorgan. Both have seen stellar returns. Merrill Lynch World Mining trust has posted returns of almost 500 per cent in the past five years.

Copyright The Financial Times Limited 2007