Source: Le Temps
La chaleur dans les pays de l’Est a affecté les récoltes
La pluie, le froid et la canicule ont pénalisé les récoltes de céréales
Les prix des céréales, blé en tête, ont poursuivi leur ascension, jeudi, sur le marché toujours conforté par la dégradation des cultures à l’est de l’Europe. La situation dans ces pays s’aggrave chaque jour un peu plus, les fortes chaleurs dépréciant la qualité des grains tout en entamant le potentiel de la récolte.
En Russie, dans les zones les plus touchées, les rendements seraient inférieurs de moitié à ceux de 2009. En Ukraine, le rendement moyen tournerait autour de 27,5 quintaux à l’hectare, contre 31,5 quintaux l’an passé. Les blés du Kazakhstan ne seraient pas à la hauteur de leur réputation.
La catastrophe soutient les prix chez les autres exportateurs, en particulier les Etats-Unis, le Canada, l’Australie et l’Union européenne. Ces derniers entrevoient de belles opportunités de ventes sur le pourtour méditerranéen ou dans le Sud-Est asiatique. A Chicago, les cours du blé ont grimpé de 29% en juillet, soit le plus grand gain depuis août 1973.
NEWS - Commodites, Agriculture, Green Investment - NEWS
7/29/2010
The Farmer Opportunity in India
July 14, 2010, 11:36 AM IST
By Sandeep Singhal
In the last three years, Nexus has invested in two agriculture-focused companies. Suminter India Organics contracts with small and medium-sized farmers to grow organic produce that it then processes and exports. Sohanlal Commodity Management provides warehousing and logistics services to farmers, commodity exchanges and agriculture processors.
Based on my experience while sitting on these boards, there are a number of opportunities for entrepreneurs and companies that want to build business models aimed at farmers.
Here are some of the encouraging trends I see:
–Corporations want to deal directly farmers.
Associated Press
There are a number of opportunities to build business models aimed at the farmer Companies like PepsiCo, ITC and Godrej have been creating integrated supply chains for the last decade but have typically focused on specific products (e.g. Pepsi with potatoes and tomatoes, ITC with wheat.) In recent times, organized retail chains like Reliance Fresh and Food Bazaar have set up integrated procurement systems that directly reach the farmer instead of working through intermediaries. They also have increased the range of products they procure. Global trading companies like Cargill and Glencore have increased their procurement in the Indian market and have set up some presence in mandis, or local markets.
–Farmers are getting more information.
This information ranges from the most current procurement prices at regional mandis to marketing committee locations (provided by the National Spot Exchange and others) to weather reports and forecasts from mobile operators and specialist providers like Weather Risk Management Services. ITC has been providing this information at its eChoupals (kiosks that provide price information) for some time. Others have similar offerings.
–Recent policies aim to increase efficiency. For example, the “Warehouse and Distribution Act” calls for accreditation of warehouses, which will improve post-harvest management and reduce spoilage. It will also reduce the cost of intermediaries in the procurement process by facilitating warehouse receipt financing and by providing subsidies to build warehouses.
The new nutrient-based subsidy policy also helps optimize the use of fertilizers and improve soil quality. The earlier subsidy policy only covered a few products but the new policy gives a subsidy based on the nutrients in the fertilizer. This lowers the price of complex fertilizers and allows the farmer to choose the right fertilizer for their crop and soil type.
Agriculture is a large and disorganized market. So, there are many inefficiencies which require smart solutions. Farmers are increasingly more open to cooperating with private players as long as they are convinced of increased revenue, lower costs, and/or sustainability. The farming community is driven by word-of-mouth marketing and that can help an entrepreneur scale a business over time.
–Sandeep Singhal is co-founder Nexus Venture Partners, a venture firm with $320 million under management. Nexus has an active portfolio of over 20 companies across several Indian industries including technology, consumer services, media, outsourced services, the Internet and mobile, alternate energy and agribusiness.
By Sandeep Singhal
In the last three years, Nexus has invested in two agriculture-focused companies. Suminter India Organics contracts with small and medium-sized farmers to grow organic produce that it then processes and exports. Sohanlal Commodity Management provides warehousing and logistics services to farmers, commodity exchanges and agriculture processors.
Based on my experience while sitting on these boards, there are a number of opportunities for entrepreneurs and companies that want to build business models aimed at farmers.
Here are some of the encouraging trends I see:
–Corporations want to deal directly farmers.
Associated Press
There are a number of opportunities to build business models aimed at the farmer Companies like PepsiCo, ITC and Godrej have been creating integrated supply chains for the last decade but have typically focused on specific products (e.g. Pepsi with potatoes and tomatoes, ITC with wheat.) In recent times, organized retail chains like Reliance Fresh and Food Bazaar have set up integrated procurement systems that directly reach the farmer instead of working through intermediaries. They also have increased the range of products they procure. Global trading companies like Cargill and Glencore have increased their procurement in the Indian market and have set up some presence in mandis, or local markets.
–Farmers are getting more information.
This information ranges from the most current procurement prices at regional mandis to marketing committee locations (provided by the National Spot Exchange and others) to weather reports and forecasts from mobile operators and specialist providers like Weather Risk Management Services. ITC has been providing this information at its eChoupals (kiosks that provide price information) for some time. Others have similar offerings.
–Recent policies aim to increase efficiency. For example, the “Warehouse and Distribution Act” calls for accreditation of warehouses, which will improve post-harvest management and reduce spoilage. It will also reduce the cost of intermediaries in the procurement process by facilitating warehouse receipt financing and by providing subsidies to build warehouses.
The new nutrient-based subsidy policy also helps optimize the use of fertilizers and improve soil quality. The earlier subsidy policy only covered a few products but the new policy gives a subsidy based on the nutrients in the fertilizer. This lowers the price of complex fertilizers and allows the farmer to choose the right fertilizer for their crop and soil type.
Agriculture is a large and disorganized market. So, there are many inefficiencies which require smart solutions. Farmers are increasingly more open to cooperating with private players as long as they are convinced of increased revenue, lower costs, and/or sustainability. The farming community is driven by word-of-mouth marketing and that can help an entrepreneur scale a business over time.
–Sandeep Singhal is co-founder Nexus Venture Partners, a venture firm with $320 million under management. Nexus has an active portfolio of over 20 companies across several Indian industries including technology, consumer services, media, outsourced services, the Internet and mobile, alternate energy and agribusiness.
7/28/2010
TIAA-CREF: Why investments in farmland are now 'like gold'
TIAA-CREF aims to add to its $2 billion holdings of farmland to help diversify its portfolio and hedge against inflation, said the pension-fund manager's director for private-equity investments in agriculture.
Market INtelligence
“We don't have enough” farmland, Jose Minaya said on the sidelines of Terrapinn's Agriculture Outlook conference in London. TIAA-CREF, which manages about $417 billion in pension funds and is based in New York, expects its portfolio of agricultural property to generate absolute returns of between 8 percent and 12 percent, he said.
Global agriculture output must rise 70 percent by 2050 as the world population swells, boosting demand for farmland, the United Nations' Food and Agriculture Organization has said. By mid-century, planted acreage may need to expand 16 percent, provided historic trends in yield increases don't change, according to a study sponsored by companies including Monsanto Co. and published in March.
“We're actively in the market, still growing our portfolio,” Minaya said. “We're seeing opportunities, but it's very hard to scale up in this asset class.”
Agricultural land has “low to little correlation” with other asset classes, helping to diversify the investment portfolio, he said. It also provides a hedge against inflation, according to Minaya. About half of TIAA-CREF's expected total returns from farmland will stem from capital gains and the rest from operational returns, he said.
‘Like Gold'
“Farmland is also a store of wealth,” Minaya said. “It's kind of like gold.”
TIAA-CREF owns agricultural land in the U.S., Australia, Brazil and central and Eastern Europe, most of which is leased out, Minaya said. U.S. real estate represents its largest farmland holding, he said. The pension-fund manager also has about $1.5 billion of timberland, according to Minaya.
Little data is available to analyze farmland's performance and risk as an asset class because of a lack of institutional investment, according to the director.
“The opportunities are a challenge,” Minaya said. “It's not a very efficient market. If you're doing it in a prudent way, it's really hard to say how long it will take to deploy” capital.
Farmland's low risk profile has started to attract investors, he said.
“Over the last decade or so, there have been other, better-yielding assets,” Minaya said, adding that before the credit crisis, investors would ask why they shouldn't invest in “a triple-A, double-digit-yielding CDO tranche” instead.
“Today you don't have to answer that question,” he said.
Market INtelligence
“We don't have enough” farmland, Jose Minaya said on the sidelines of Terrapinn's Agriculture Outlook conference in London. TIAA-CREF, which manages about $417 billion in pension funds and is based in New York, expects its portfolio of agricultural property to generate absolute returns of between 8 percent and 12 percent, he said.
Global agriculture output must rise 70 percent by 2050 as the world population swells, boosting demand for farmland, the United Nations' Food and Agriculture Organization has said. By mid-century, planted acreage may need to expand 16 percent, provided historic trends in yield increases don't change, according to a study sponsored by companies including Monsanto Co. and published in March.
“We're actively in the market, still growing our portfolio,” Minaya said. “We're seeing opportunities, but it's very hard to scale up in this asset class.”
Agricultural land has “low to little correlation” with other asset classes, helping to diversify the investment portfolio, he said. It also provides a hedge against inflation, according to Minaya. About half of TIAA-CREF's expected total returns from farmland will stem from capital gains and the rest from operational returns, he said.
‘Like Gold'
“Farmland is also a store of wealth,” Minaya said. “It's kind of like gold.”
TIAA-CREF owns agricultural land in the U.S., Australia, Brazil and central and Eastern Europe, most of which is leased out, Minaya said. U.S. real estate represents its largest farmland holding, he said. The pension-fund manager also has about $1.5 billion of timberland, according to Minaya.
Little data is available to analyze farmland's performance and risk as an asset class because of a lack of institutional investment, according to the director.
“The opportunities are a challenge,” Minaya said. “It's not a very efficient market. If you're doing it in a prudent way, it's really hard to say how long it will take to deploy” capital.
Farmland's low risk profile has started to attract investors, he said.
“Over the last decade or so, there have been other, better-yielding assets,” Minaya said, adding that before the credit crisis, investors would ask why they shouldn't invest in “a triple-A, double-digit-yielding CDO tranche” instead.
“Today you don't have to answer that question,” he said.
7/24/2010
Is agriculture the next big investment thing?
As the world's population expands, China switches from rice to meat, and biofuel growth looks set to rocket, City experts think agriculture is the best place to make money in the next decade
Patrick Collinson The Guardian, Saturday 24 July 2010
Hedge funds, with billions of pounds in assets, are recklessly gambling on food prices, with speculators driving massive price volatility that threatens the most vulnerable people on the planet.
That's the view of the World Development Movement (WDM), which issued a damning report this week arguing for a regulatory clampdown on hedge funds and banks in the commodities market.
It launched a campaign which saw the Financial Services Authority's switchboard jammed with calls from protestors demanding curbs on speculation. But over at Britain's oldest food market, Borough Market in London, fund managers at one of the biggest investment groups in the world, BlackRock, were telling a rather different story.
It was rolling out its World Agriculture fund for small investors who, it says, can profit from the long-term increase in food prices as rising affluence in China, India and Brazil dramatically changes dietary habits.
BlackRock is not alone in seeing agriculture as a potential new goldmine. Last year, Baring launched a global agriculture fund which is already more than £100m in size and has given its earliest investors a 30% gain. Both groups see their funds as appropriate investments for British pensions and Isas over the long term.
Should you be tempted to? Or, by doing so, are you simply exacerbating speculation in food that has seen products such as cocoa spiral by 150% in the last 18 months? And are the claims of the fund managers robust? Is food really that likely to be a good investment over the next 10–20 years?
WDM campaigner Kate Blagojevic aims her fury not so much at longer-term investors, but at short-term speculators who, WDM claims, have made commodity markets more volatile than ever. "Population growth, increased demand and climate change are all contributing to a long-term gradual rise in the price of food.
"But we feel speculators are taking these trends and exacerbating them, creating such price instability that it's having a devastating impact on farmers. Let's say you are a cocoa farmer. Prices are at a 30-year high. How much do you grow next year, when the price might fall as suddenly?"
But haven't commodity prices always swung violently? The WDM report, The Great Hunger Lottery, argues that during the 1990s and early 2000s, aggressive lobbying by bankers led to weaker regulations covering speculation in agricultural contracts. "Over the past decade, the world's most powerful financial institutions have developed ever more elaborate ways to package, re-package and trade a range of financial contracts known as derivatives ... destabilising and driving up food prices."
Indeed, even small investors can now play the commodity markets through "Exchange Traded Funds" (ETFs), synthetic indices which match price movements in things such as wheat, corn and soybeans, and where you can start speculating with as little as a few pounds.
But BlackRock and Baring both deny they are at the speculative end of the market. Firstly, their agricultural funds don't buy underlying commodities, but trade in the shares of companies involved in agriculture.
And BlackRock fund manager Richard Davis is not even basing his case for investment on an explosion in food prices. He reckons that, over the long term, food prices will trend higher, "but they're not about to go through the roof". Instead, there will be a "supply side response," with the fund, he hopes, benefiting from higher profitability among farmers and the companies that supply them as they expand production and reduce unit costs.
Jonathan Blake is the manager of Baring Global Agriculture, and says the fund is about "three Fs": food, feed and fuel. This planet currently supports 6.5bn people, but by 2050 that is projected to grow to around 9.2bn. That's an awful lot more mouths to feed, and it means the long-term price pressure on agricultural products is going only one way – up.
In 1950, there were 0.5 hectares of arable land per person in the world, but it has already fallen to just over 0.2 hectares. BlackRock estimates that global food production needs to rise by more than 70% by 2050 above 2005-2007 levels to cope with rising food demand. Feed is all about the fact that, as consumers in emerging markets start to earn more, one of the first behavioural changes is a shift from a vegetarian diet to a more meat-based diet. That means the demand for animal feed will rocket over the coming years. After all, it takes over 8kg of grain to produce just 1kg of beef.
BlackRock's Davis adds: "We think it's going to be a slow process. We don't think everyone in China is suddenly going to start eating steak – what you tend to see is that it starts with fish and poultry – but it is a process which China has started on."
Indeed, there is some evidence that dietary changes in Brazil, China and India are happening more rapidly than in Japan and Korea during their development phases. If the Chinese match the diets of modern Koreans, it will mean a 3.7% fall in global demand for rice, but a 27% increase in global consumption of meat and fish.
The impact of biofuels is another core reason to buy agricultural equities, say both fund management firms. As recently as 2000, the global land use for ethanol production was around 10m hectares, but it is projected to rise to 120m hectares by 2015. On the one hand, it will reduce the acreage available for other crops, and on the other, it will directly affect the demand for sugar, corn, and oilseed rape for bio-diesel.
BlackRock likes sugar ethanol producers such as Cosan and Sao Martinho in Brazil, where 90% of the new vehicles sold are "flex-fuel vehicles" that can be run entirely on ethanol.
The country is also home to one of Baring's biggest agricultural holdings, underlining its importance as a commodity provider to China. Baring's Jonathan Blake likes Brasil Foods, a low-cost chicken and processed meat producer. It's one of those companies that few people in the West have heard of, but says a lot about how fast emerging markets are developing.
It is the world's 10th largest food company employing 120,000 people in 42 factories. "We have a planet to conquer," chief executive Nildemar Secches told reporters in May as it merged with another big food producer. Since then, its share price has trended upwards to $15 from around $12.
One surprise is that global food prices, despite what WDM argues, have been flat or falling since 2006-07. The harvest last year in North America was good, and global weather conditions have been relatively benign.
One of the uncomfortable facts about investing in agricultural funds is that good weather is a "risk factor" that could depress returns, as harvests are abundant. These funds will also sorely test ethical investors, as "agricultural science" companies such as GM-developer Monsanto can feature heavily.
How to invest
The minimum investment in Baring Global Agriculture is £2,000, while in BlackRock's BGF World Agriculture fund it is $5,000 (£3,300). Read our guide to investing.Avoid initial charges of 5%-6% by buying via a discount broker. Try h-l.co.uk or chelseafs.co.uk, or a fund supermarket such as fundsnetwork.co.uk (run by Fidelity ).
Cargill-Owned Commodity Hedge Fund Opens Up
Jul 23 2010 | 12:25pm ET
A Cargill-owned hedge fund is opening its long/short commodity equities fund to outside investors, hoping to raise almost $200 million.
Black River Asset Management is marketing its Commodity Equity Long/Short Opportunity Fund to institutional investors around the world. The fund, which debuted in September, seeded with $60 million, invests in stocks in the commodity chains that Cargill is found, HFMWeek reports. Among the sectors it focuses on are fertilizers, food distribution, energy, grains, meat, steel and transportation.
The fund charges 2% for management and 20% for performance and features a $1 million minimum investment requirement. It offers quarterly liquidity with 60 days’ notice. The fund has a capacity of $250 million.
Gregg Groechel, head of Black River’s long/short equity business for five years, is the manager of the fund.
A Cargill-owned hedge fund is opening its long/short commodity equities fund to outside investors, hoping to raise almost $200 million.
Black River Asset Management is marketing its Commodity Equity Long/Short Opportunity Fund to institutional investors around the world. The fund, which debuted in September, seeded with $60 million, invests in stocks in the commodity chains that Cargill is found, HFMWeek reports. Among the sectors it focuses on are fertilizers, food distribution, energy, grains, meat, steel and transportation.
The fund charges 2% for management and 20% for performance and features a $1 million minimum investment requirement. It offers quarterly liquidity with 60 days’ notice. The fund has a capacity of $250 million.
Gregg Groechel, head of Black River’s long/short equity business for five years, is the manager of the fund.
7/23/2010
Commodity Alpha and Beta in Institutional Portfolios
Posted on July 13th, 2010, in AlphaMetrix
Institutional investors’ interest in commodity and natural resource investments has increased substantially since the early 2000s. The potential for adding uncorrelated performance, protecting the value of investments during inflationary environments, and the prospect of participating in a “secular bull run” originating from aging resource production infrastructure and burgeoning demand from emerging economies in Asia have captured the attention of investors and financial media alike. Swollen central bank balance sheets and anxiety over the debasement of fiat currencies have also contributed to institutional investor interest in commodities.
In general, institutional investors appear to prefer to access commodity exposure in their portfolios through commodity “beta.” There is no consensus on what commodity beta precisely is, or if commodity beta exists at all, but for the purpose of this report, commodity beta is defined as long exposure to one of the passive long-only commodity indices such as the S&P Goldman Sachs Commodity Index (“S&P GSCI”), Dow Jones UBS Commodity Index, Rogers International Commodity Index (“RICI”), or others.
While passive long-only commodity indices provide investors with inexpensive long exposure to natural resources, there are substantial disadvantages to the beta approach to commodity investing of which investors must be aware. Most notably, long-only indices can be extremely volatile and are susceptible to large losses. The S&P GSCI, DJ UBS Commodity Index, and RICI all experienced peak-to-valley losses of 50 to 70 percent during the financial crisis of 2008. Further, passive long-only indices may not offer balanced exposure to different commodity sectors. For example, the S&P GSCI allocates over 70 percent of the index to energy, and the other indices tend to be lopsided as well. Last, negative roll yield in commodity future (accessing commodity exposure through physical commodities tends to be prohibitively expensive and problematic due to storage and other reasons) in contango can also be detrimental to the performance of the passive long-only indices.
Despite these weaknesses, passive long-only commodity index investing is relatively commonplace, with institutional investors typically turning to total return swaps, exchange traded funds or notes, index futures, or futures-based index.
Institutional investors wishing to avoid the inherent shortcomings of passive commodity indices may instead access the natural resources space through commodity “alpha,” which for the purposes of this article, is defined as actively managed exposure to natural resources with the flexibility to take long, short, neutral, or spread positions. Examples include natural resources-focused hedge funds and commodity trading advisors, natural resources fund of funds and multi-manager portfolios, and actively-managed or semi-passive natural resource index products.
Commodity alpha offers investors the potential benefits of active management, namely the ability to take advantage of opportunities on both the long and short side, as well as the ability to deploy relative value or niche strategies. These qualities often result in uncorrelated performance which can enhance portfolio diversification and help to dampen volatility. Alpha investments also typically actively manage risk in response to changing market conditions, so their volatility and susceptibility to large losses tend to be better controlled than for the passive long-only indices.
The potential benefits of commodity alpha do come with additional costs. Alpha managers typically charge higher fees, and may only partially capture the upside of passive long-only indices, limiting the investor’s ability to participate to the fullest extent possible in commodity bull markets. It may also be difficult to understand the timing of, reasons for and degree to which different alpha managers or investments capitalize on price moves. The investor is also subject to the additional costs of manager sourcing, selection, due diligence and monitoring, all of which require specialized expertise.
Investors seeking a more balanced approach can combine commodity alpha and beta investments to meet their own objectives or risk and return preferences. This can be done by focusing on sector specialists, creating different blends using commodity beta and alpha investments, or by building structured products, all of which may have customized correlation or risk properties relative to the passive long-only indices. An investor could, for instance, create a portfolio that offers high correlation to one of the passive long-only indices but with lower risk.
Commodity alpha investments offer institutional investors an alternative to beta plays using passive long-only indices to gain commodity exposure. Actively managed commodity alpha strategies provide investors with exposure to the asset class with the added benefits of opportunistic trading from both the long and short side, active risk management, and the potential for decreased volatility and losses. The allure of additional diversification alpha investments may offer, and the value that they can add through active management, may make them a compelling way to access the assets class.
Institutional investors’ interest in commodity and natural resource investments has increased substantially since the early 2000s. The potential for adding uncorrelated performance, protecting the value of investments during inflationary environments, and the prospect of participating in a “secular bull run” originating from aging resource production infrastructure and burgeoning demand from emerging economies in Asia have captured the attention of investors and financial media alike. Swollen central bank balance sheets and anxiety over the debasement of fiat currencies have also contributed to institutional investor interest in commodities.
In general, institutional investors appear to prefer to access commodity exposure in their portfolios through commodity “beta.” There is no consensus on what commodity beta precisely is, or if commodity beta exists at all, but for the purpose of this report, commodity beta is defined as long exposure to one of the passive long-only commodity indices such as the S&P Goldman Sachs Commodity Index (“S&P GSCI”), Dow Jones UBS Commodity Index, Rogers International Commodity Index (“RICI”), or others.
While passive long-only commodity indices provide investors with inexpensive long exposure to natural resources, there are substantial disadvantages to the beta approach to commodity investing of which investors must be aware. Most notably, long-only indices can be extremely volatile and are susceptible to large losses. The S&P GSCI, DJ UBS Commodity Index, and RICI all experienced peak-to-valley losses of 50 to 70 percent during the financial crisis of 2008. Further, passive long-only indices may not offer balanced exposure to different commodity sectors. For example, the S&P GSCI allocates over 70 percent of the index to energy, and the other indices tend to be lopsided as well. Last, negative roll yield in commodity future (accessing commodity exposure through physical commodities tends to be prohibitively expensive and problematic due to storage and other reasons) in contango can also be detrimental to the performance of the passive long-only indices.
Despite these weaknesses, passive long-only commodity index investing is relatively commonplace, with institutional investors typically turning to total return swaps, exchange traded funds or notes, index futures, or futures-based index.
Institutional investors wishing to avoid the inherent shortcomings of passive commodity indices may instead access the natural resources space through commodity “alpha,” which for the purposes of this article, is defined as actively managed exposure to natural resources with the flexibility to take long, short, neutral, or spread positions. Examples include natural resources-focused hedge funds and commodity trading advisors, natural resources fund of funds and multi-manager portfolios, and actively-managed or semi-passive natural resource index products.
Commodity alpha offers investors the potential benefits of active management, namely the ability to take advantage of opportunities on both the long and short side, as well as the ability to deploy relative value or niche strategies. These qualities often result in uncorrelated performance which can enhance portfolio diversification and help to dampen volatility. Alpha investments also typically actively manage risk in response to changing market conditions, so their volatility and susceptibility to large losses tend to be better controlled than for the passive long-only indices.
The potential benefits of commodity alpha do come with additional costs. Alpha managers typically charge higher fees, and may only partially capture the upside of passive long-only indices, limiting the investor’s ability to participate to the fullest extent possible in commodity bull markets. It may also be difficult to understand the timing of, reasons for and degree to which different alpha managers or investments capitalize on price moves. The investor is also subject to the additional costs of manager sourcing, selection, due diligence and monitoring, all of which require specialized expertise.
Investors seeking a more balanced approach can combine commodity alpha and beta investments to meet their own objectives or risk and return preferences. This can be done by focusing on sector specialists, creating different blends using commodity beta and alpha investments, or by building structured products, all of which may have customized correlation or risk properties relative to the passive long-only indices. An investor could, for instance, create a portfolio that offers high correlation to one of the passive long-only indices but with lower risk.
Commodity alpha investments offer institutional investors an alternative to beta plays using passive long-only indices to gain commodity exposure. Actively managed commodity alpha strategies provide investors with exposure to the asset class with the added benefits of opportunistic trading from both the long and short side, active risk management, and the potential for decreased volatility and losses. The allure of additional diversification alpha investments may offer, and the value that they can add through active management, may make them a compelling way to access the assets class.
7/14/2010
First State Global Agribusiness – fund launch
Richard Troue | Tue 08 June
By 2050 the world population is set to hit 9 billion people, up from just under 7 billion today and quadruple the level of 1950. Much of this growth is expected to come from emerging markets, which are also becoming more affluent. To capitalise on this trend First State has launched the Global Agribusiness Fund, which aims to benefit from what they believe will be significant growth in demand for agricultural products, as consumption in emerging markets increases.
The fund is managed by Renzo Casarotto and Skye Macpherson who are part of the First State Global Resources Team, which has over 12 years’ experience successfully investing in resource companies. This fund is viewed as an extension of that process and will invest in companies involved in the production, processing, distribution and marketing of agricultural products.
Wealthier populations tend to increase food consumption and change their diets, eating more meat which is much more agriculturally intensive to produce. As a rule of thumb 1kg of beef production requires 7kg of grain and up to 15,000 litres of water! This puts increasing pressure on the production of cereals and fresh water with estimates suggesting twice as much food will be required in 2050 as in 2008.
The problem is exacerbated by a decline in the amount of land available for agricultural use and a trend towards rural populations migrating to urban areas to seek a more prosperous working life. First State believes companies helping to produce more food from the available land will therefore deliver strong growth over the long term.
We have been supportive of the First State Global Resources Team for a number of years and admire their experience and pragmatic approach. They don’t forecast commodity prices, which can be volatile, so they won’t buy into a wheat producer, for example, purely on the belief the price will rise in the short term. Instead they focus on high quality businesses which have significant growth potential, as they believe this will lead to higher returns over the long term.
At launch two of their largest holdings are Syngenta, who specialise in crop disease protection, and the world’s largest fertilizer company, Potash Corp. They have also invested in companies which produce agricultural equipment, such as Japanese company Kubota which is benefiting from the increased mechanisation of rice planting and harvesting in Asia.
Around one third of the fund is invested in America and 20% in Canada. They will also invest in faster growing emerging markets including China and Brazil, which is considered by First State to be a growing force in world agriculture. Please remember emerging markets are higher risk and will be more volatile than developed markets. The fund can also invest in smaller companies which are more volatile than their larger counterparts. This will be a concentrated portfolio of between 25 to 75 stocks which will allow the managers to invest in their highest conviction ideas, but it can also increase risk.
The increased pressure placed upon agricultural production by demographic issues, rising energy prices and climate change is likely to drive up prices for everything from land and fertiliser to storage and transportation. Although investing in a specific sector carries more risk than a diversified portfolio. We believe there are significant opportunities in this area for investors who are able to accept the risks and take a long-term view, but we would like to see how the fund performs before considering it for inclusion in the Wealth 150 list of our favourite funds in each sector.
Key Features of the First State Global Agribusiness Fund
The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.
By 2050 the world population is set to hit 9 billion people, up from just under 7 billion today and quadruple the level of 1950. Much of this growth is expected to come from emerging markets, which are also becoming more affluent. To capitalise on this trend First State has launched the Global Agribusiness Fund, which aims to benefit from what they believe will be significant growth in demand for agricultural products, as consumption in emerging markets increases.
The fund is managed by Renzo Casarotto and Skye Macpherson who are part of the First State Global Resources Team, which has over 12 years’ experience successfully investing in resource companies. This fund is viewed as an extension of that process and will invest in companies involved in the production, processing, distribution and marketing of agricultural products.
Wealthier populations tend to increase food consumption and change their diets, eating more meat which is much more agriculturally intensive to produce. As a rule of thumb 1kg of beef production requires 7kg of grain and up to 15,000 litres of water! This puts increasing pressure on the production of cereals and fresh water with estimates suggesting twice as much food will be required in 2050 as in 2008.
The problem is exacerbated by a decline in the amount of land available for agricultural use and a trend towards rural populations migrating to urban areas to seek a more prosperous working life. First State believes companies helping to produce more food from the available land will therefore deliver strong growth over the long term.
We have been supportive of the First State Global Resources Team for a number of years and admire their experience and pragmatic approach. They don’t forecast commodity prices, which can be volatile, so they won’t buy into a wheat producer, for example, purely on the belief the price will rise in the short term. Instead they focus on high quality businesses which have significant growth potential, as they believe this will lead to higher returns over the long term.
At launch two of their largest holdings are Syngenta, who specialise in crop disease protection, and the world’s largest fertilizer company, Potash Corp. They have also invested in companies which produce agricultural equipment, such as Japanese company Kubota which is benefiting from the increased mechanisation of rice planting and harvesting in Asia.
Around one third of the fund is invested in America and 20% in Canada. They will also invest in faster growing emerging markets including China and Brazil, which is considered by First State to be a growing force in world agriculture. Please remember emerging markets are higher risk and will be more volatile than developed markets. The fund can also invest in smaller companies which are more volatile than their larger counterparts. This will be a concentrated portfolio of between 25 to 75 stocks which will allow the managers to invest in their highest conviction ideas, but it can also increase risk.
The increased pressure placed upon agricultural production by demographic issues, rising energy prices and climate change is likely to drive up prices for everything from land and fertiliser to storage and transportation. Although investing in a specific sector carries more risk than a diversified portfolio. We believe there are significant opportunities in this area for investors who are able to accept the risks and take a long-term view, but we would like to see how the fund performs before considering it for inclusion in the Wealth 150 list of our favourite funds in each sector.
Key Features of the First State Global Agribusiness Fund
The value of investments can go down as well as up, this means you could get back less than you invested. Therefore all investments should be regarded with a long term view. No news or research item is a personal recommendation to deal. If you are unsure about the suitability of an investment please contact us for advice.
7/12/2010
Commodities grow more appealing
By Sophia Grene
Published: July 11 2010 07:06 | Last updated: July 11 2010 07:06
The most striking story in this year’s FTfm/Towers Watson survey of alternative investment managers looking after pension fund money centres on commodities: the level of pension fund assets accounted for by commodities managers among the top 100 managers tripled in 2009. There are now five such managers in the top 100, compared with just one in 2008 (PDF of top 20).
Framed differently, the story is a little less compelling, as this is from a low base. Pension fund assets allocated to commodities within the top 100 managers have risen from 0.4 per cent to 2 per cent.
EDITOR’S CHOICE
US pension funds remain cautious on commodities - Jul-09.Hot weather drives wheat to six-month high - Jul-08.Commodities demand stays robust - Jul-07.White sugar premium hits highest in 22 years - Jun-24.BIS gold swap confuses as price rebounds - Jul-07.Lex: Cocoa - Jul-06..Even now, pension fund assets managed by the 22 commodities managers who responded to the survey are just $28bn (£18.5bn, €22bn), or 3 per cent of the total $894,243m of pension fund assets managed by the 149 fund managers (224 entries as some groups manage assets in more than one area) the survey covers.
But this is a meaningful trend, according to Alasdair MacDonald, a senior investment consultant at Towers Watson, and one he expects to continue.
Pension funds are taking advantage of the collapse in commodity prices that followed the financial crisis to gain exposure to the asset class at an attractive level, Mr MacDonald says.
“Given that pension funds are slow movers, you will continue to see allocations in 2010,” he predicts.
Investment in commodities is not necessarily a vote of confidence that their prices will rise, of course. Commodity hedge funds, for example, make money in the liquid and fast-moving commodities futures markets by exploiting small, short-term movements up or down and aim to deliver positive returns regardless of market prices.
This kind of investment in commodities is not showing up in the survey, however, although it is possible there are such investments within the funds of hedge funds. Instead, the types of managers appearing in the top 100 show pension funds putting their money with large managers looking for market returns.
The top five commodities managers for pension funds are Pimco, Gresham Investment Managers, Schroders, Diapason and Hermes. Just two of these are commodities specialists – Gresham and Diapason – neither is a market-neutral player, so it is reasonable to assume pension funds see commodities as a strategic allocation rather than an opportunity for alpha.
The attraction of commodities lies largely in expectations about how they will behave in relation to other assets or in particular situations.
“Clients are mainly going in to get exposure to the beta, to get some of the nice characteristics of commodities,” Mr MacDonald says. While diversification is a key characteristic attracting investors, he warns “it is easy to overstate the diversification benefit”.
More to the point, he thinks, are “some nice tail-hedges, such as if tensions rise in the Middle East”. A geopolitical crisis in the region would probably lead to higher oil prices, so investors concerned about the impact on equities would have the consolation of making money on the commodities investment.
On the whole, pension funds are taking a broad approach, asking managers to manage assets against broad indices rather than specific commodities or commodity sectors.
“They want to have as broad an exposure to commodities as possible,” Mr MacDonald adds. “It’s not possible for a pension fund to take a view on individual commodity classes.”
The exception to this rule is Diapason, which has a particular interest in agricultural commodities.
One notable aspect of pension funds’ allocations to commodities is the concentration in the top managers. The top five account for more than 70 per cent of the assets managed for pension funds by the top 20 managers, with the next 10 adding a further 28 per cent. Smaller managers scraped up just 1 per cent of assets between them.
This is to be expected, Mr MacDonald explains, as “we look at commodities as a semi-passive allocation” because the main benefit of the asset class is the diversification for a portfolio, rather than the outperformance of a single manager.
Where manager skill is not the primary objective, economies of scale can become a differentiator. This can result in the market being dominated by a small number of large players. However, since commodities can offer alpha opportunities, small players may thrive on the sidelines, but they may not be able to deal with larger pension funds due to capacity constraints.
Published: July 11 2010 07:06 | Last updated: July 11 2010 07:06
The most striking story in this year’s FTfm/Towers Watson survey of alternative investment managers looking after pension fund money centres on commodities: the level of pension fund assets accounted for by commodities managers among the top 100 managers tripled in 2009. There are now five such managers in the top 100, compared with just one in 2008 (PDF of top 20).
Framed differently, the story is a little less compelling, as this is from a low base. Pension fund assets allocated to commodities within the top 100 managers have risen from 0.4 per cent to 2 per cent.
EDITOR’S CHOICE
US pension funds remain cautious on commodities - Jul-09.Hot weather drives wheat to six-month high - Jul-08.Commodities demand stays robust - Jul-07.White sugar premium hits highest in 22 years - Jun-24.BIS gold swap confuses as price rebounds - Jul-07.Lex: Cocoa - Jul-06..Even now, pension fund assets managed by the 22 commodities managers who responded to the survey are just $28bn (£18.5bn, €22bn), or 3 per cent of the total $894,243m of pension fund assets managed by the 149 fund managers (224 entries as some groups manage assets in more than one area) the survey covers.
But this is a meaningful trend, according to Alasdair MacDonald, a senior investment consultant at Towers Watson, and one he expects to continue.
Pension funds are taking advantage of the collapse in commodity prices that followed the financial crisis to gain exposure to the asset class at an attractive level, Mr MacDonald says.
“Given that pension funds are slow movers, you will continue to see allocations in 2010,” he predicts.
Investment in commodities is not necessarily a vote of confidence that their prices will rise, of course. Commodity hedge funds, for example, make money in the liquid and fast-moving commodities futures markets by exploiting small, short-term movements up or down and aim to deliver positive returns regardless of market prices.
This kind of investment in commodities is not showing up in the survey, however, although it is possible there are such investments within the funds of hedge funds. Instead, the types of managers appearing in the top 100 show pension funds putting their money with large managers looking for market returns.
The top five commodities managers for pension funds are Pimco, Gresham Investment Managers, Schroders, Diapason and Hermes. Just two of these are commodities specialists – Gresham and Diapason – neither is a market-neutral player, so it is reasonable to assume pension funds see commodities as a strategic allocation rather than an opportunity for alpha.
The attraction of commodities lies largely in expectations about how they will behave in relation to other assets or in particular situations.
“Clients are mainly going in to get exposure to the beta, to get some of the nice characteristics of commodities,” Mr MacDonald says. While diversification is a key characteristic attracting investors, he warns “it is easy to overstate the diversification benefit”.
More to the point, he thinks, are “some nice tail-hedges, such as if tensions rise in the Middle East”. A geopolitical crisis in the region would probably lead to higher oil prices, so investors concerned about the impact on equities would have the consolation of making money on the commodities investment.
On the whole, pension funds are taking a broad approach, asking managers to manage assets against broad indices rather than specific commodities or commodity sectors.
“They want to have as broad an exposure to commodities as possible,” Mr MacDonald adds. “It’s not possible for a pension fund to take a view on individual commodity classes.”
The exception to this rule is Diapason, which has a particular interest in agricultural commodities.
One notable aspect of pension funds’ allocations to commodities is the concentration in the top managers. The top five account for more than 70 per cent of the assets managed for pension funds by the top 20 managers, with the next 10 adding a further 28 per cent. Smaller managers scraped up just 1 per cent of assets between them.
This is to be expected, Mr MacDonald explains, as “we look at commodities as a semi-passive allocation” because the main benefit of the asset class is the diversification for a portfolio, rather than the outperformance of a single manager.
Where manager skill is not the primary objective, economies of scale can become a differentiator. This can result in the market being dominated by a small number of large players. However, since commodities can offer alpha opportunities, small players may thrive on the sidelines, but they may not be able to deal with larger pension funds due to capacity constraints.
7/09/2010
FourWinds Capital Acquires Cole Partners' Fund of Commodity Hedge Funds
By Chanyaporn Chanjaroen - Jul 8, 2010
FourWinds Capital Management, which manages more than $1 billion in natural-resource funds, took over the management of Cole Partners Asset Management LLC’s fund of commodity funds for an undisclosed sum.
The Tellus Liquid Commodities Fund, a Delaware limited liability company, will be available for U.S. investors and have its name changed to Zephyr Liquid Commodity Fund LLC, Boston- based FourWinds said today in an e-mailed statement. The company already has a fund of commodity hedge funds called the Zephyr Commodity Fund.
“FourWinds U.S. does not anticipate making any material changes to the fund structure or strategy in the short term,” the firm said. Tellus invests in funds through so-called managed accounts and third-party platforms.
Cole Partners, based in Chicago and founded in 1998, conducts research and marketing for funds, according to its website.
FourWinds Capital Management, which manages more than $1 billion in natural-resource funds, took over the management of Cole Partners Asset Management LLC’s fund of commodity funds for an undisclosed sum.
The Tellus Liquid Commodities Fund, a Delaware limited liability company, will be available for U.S. investors and have its name changed to Zephyr Liquid Commodity Fund LLC, Boston- based FourWinds said today in an e-mailed statement. The company already has a fund of commodity hedge funds called the Zephyr Commodity Fund.
“FourWinds U.S. does not anticipate making any material changes to the fund structure or strategy in the short term,” the firm said. Tellus invests in funds through so-called managed accounts and third-party platforms.
Cole Partners, based in Chicago and founded in 1998, conducts research and marketing for funds, according to its website.
7/07/2010
China pumps billions into Canada's oil sands
By Allison Jackson (AFP)
BEIJING — Energy-hungry China, once stung in its efforts to secure access to resources in North America, is making a more subtle push into Canada's oil sands, and the new approach is paying off, experts say.
Chinese firms seeking a toehold in the largest known crude deposit outside the Middle East have opted for joint ventures and partial stakes to avoid the kind of political uproar sparked when CNOOC tried to take over US oil group Unocal in 2005.
"They are tiptoeing around the edge, not challenging anybody, not getting in any American Senators' faces -- just very quietly taking a position," said David Hewitt, regional head of oil and gas research at CLSA in Hong Kong.
"You haven't seen an aggressive attempt to buy whole companies, to own management or have dominant control."
Since the failed bid for Unocal, Chinese firms have pumped billions of dollars into the Alberta oil sands region in western Canada, which has estimated reserves of 175 billion barrels.
That compares with the more than 260 billion barrels in Saudi Arabia.
"Taking a partial stake is a lot more palatable," said Victor Shum, a Singapore-based analyst at energy consultancy Purvin and Gertz.
In the latest deal, China's 300-billion-dollar sovereign wealth fund agreed in May to invest 1.25 billion Canadian dollars (1.17 billion US) in Canadian oil sands giant Penn West to help develop its "vast oil sands resources".
Sinopec Corp, China's second-largest oil producer and top refiner, sealed a deal in April to buy US oil firm ConocoPhillips' nine percent stake in Syncrude Canada Ltd, the biggest oil sands producer, for 4.65 billion US dollars.
In August last year, PetroChina -- the country's top oil producer -- agreed to invest 1.9 billion Canadian dollars for a 60 percent stake in two projects held by Athabasca Oil Sands Corp.
The cost of extracting the heavy oil, or bitumen, from sand and clay has not deterred Chinese companies which are also scouring Africa, South America and Central Asia for energy resources needed to power the fast-growing economy.
China, the world's second largest consumer of oil after the United States, uses about eight million barrels of crude a day and imports about four million barrels, according to the US Department of Energy's statistics agency.
"Canada has some of the largest crude oil reserves in the world," said Tom Grieder, Asia Pacific energy analyst at IHS Global Insight.
Chinese state-run firms "are keen to use their financial clout to take positions in these areas to boost their reserve replacement ratios and future production streams," he said.
Concerns over state-owned companies buying key resources -- the main reason for the failure of the Unocal bid -- have been set aside by Canadian lawmakers eager to attract investment in the wake of the global financial crisis.
After the PetroChina deal was approved, Canadian Prime Minister Stephen Harper was quoted as saying: "Expect more Chinese investment in the resource and energy sectors... there will definitely be more."
Purvin and Gertz's Shum said the market environment was "completely different from 2005", with some oil majors halting projects due to the economic downturn.
"Following the financial crisis, Chinese companies are the ones with a lot of financial resources backed by the Chinese government," he said.
The massive Chinese investment also comes as US firms Conoco, Chevron and Shell face growing pressure from shareholders and green groups concerned about the impact of oil sands mining on the environment.
Environmentalists say oil sands extraction produces three to five times more carbon emissions than conventional oil production and requires tailing ponds that leak cyanide, oil, arsenic, copper and iron into local waterways.
While conventional crude oil is pumped from the ground, the sticky oil must be extracted from underneath the region's coniferous forest, separated from the sand and water, then upgraded and refined.
Despite the growing unpopularity of oil sands, further Chinese investment in the controversial fuel is in the pipeline, analysts say.
"At the moment national oil companies are targeting minority stakes to downplay political opposition and to acquire technical experience in oil sands," said Grieder.
"I think they will start to build on these deals and secure new ones in future years as opportunities arise."
With China's oil imports expected to more than double to nine million barrels per day by 2020, energy security will remain the key concern for top leaders in Beijing, said CLSA's Hewitt.
"Security of supply is absolutely essential to the Chinese," he said.
BEIJING — Energy-hungry China, once stung in its efforts to secure access to resources in North America, is making a more subtle push into Canada's oil sands, and the new approach is paying off, experts say.
Chinese firms seeking a toehold in the largest known crude deposit outside the Middle East have opted for joint ventures and partial stakes to avoid the kind of political uproar sparked when CNOOC tried to take over US oil group Unocal in 2005.
"They are tiptoeing around the edge, not challenging anybody, not getting in any American Senators' faces -- just very quietly taking a position," said David Hewitt, regional head of oil and gas research at CLSA in Hong Kong.
"You haven't seen an aggressive attempt to buy whole companies, to own management or have dominant control."
Since the failed bid for Unocal, Chinese firms have pumped billions of dollars into the Alberta oil sands region in western Canada, which has estimated reserves of 175 billion barrels.
That compares with the more than 260 billion barrels in Saudi Arabia.
"Taking a partial stake is a lot more palatable," said Victor Shum, a Singapore-based analyst at energy consultancy Purvin and Gertz.
In the latest deal, China's 300-billion-dollar sovereign wealth fund agreed in May to invest 1.25 billion Canadian dollars (1.17 billion US) in Canadian oil sands giant Penn West to help develop its "vast oil sands resources".
Sinopec Corp, China's second-largest oil producer and top refiner, sealed a deal in April to buy US oil firm ConocoPhillips' nine percent stake in Syncrude Canada Ltd, the biggest oil sands producer, for 4.65 billion US dollars.
In August last year, PetroChina -- the country's top oil producer -- agreed to invest 1.9 billion Canadian dollars for a 60 percent stake in two projects held by Athabasca Oil Sands Corp.
The cost of extracting the heavy oil, or bitumen, from sand and clay has not deterred Chinese companies which are also scouring Africa, South America and Central Asia for energy resources needed to power the fast-growing economy.
China, the world's second largest consumer of oil after the United States, uses about eight million barrels of crude a day and imports about four million barrels, according to the US Department of Energy's statistics agency.
"Canada has some of the largest crude oil reserves in the world," said Tom Grieder, Asia Pacific energy analyst at IHS Global Insight.
Chinese state-run firms "are keen to use their financial clout to take positions in these areas to boost their reserve replacement ratios and future production streams," he said.
Concerns over state-owned companies buying key resources -- the main reason for the failure of the Unocal bid -- have been set aside by Canadian lawmakers eager to attract investment in the wake of the global financial crisis.
After the PetroChina deal was approved, Canadian Prime Minister Stephen Harper was quoted as saying: "Expect more Chinese investment in the resource and energy sectors... there will definitely be more."
Purvin and Gertz's Shum said the market environment was "completely different from 2005", with some oil majors halting projects due to the economic downturn.
"Following the financial crisis, Chinese companies are the ones with a lot of financial resources backed by the Chinese government," he said.
The massive Chinese investment also comes as US firms Conoco, Chevron and Shell face growing pressure from shareholders and green groups concerned about the impact of oil sands mining on the environment.
Environmentalists say oil sands extraction produces three to five times more carbon emissions than conventional oil production and requires tailing ponds that leak cyanide, oil, arsenic, copper and iron into local waterways.
While conventional crude oil is pumped from the ground, the sticky oil must be extracted from underneath the region's coniferous forest, separated from the sand and water, then upgraded and refined.
Despite the growing unpopularity of oil sands, further Chinese investment in the controversial fuel is in the pipeline, analysts say.
"At the moment national oil companies are targeting minority stakes to downplay political opposition and to acquire technical experience in oil sands," said Grieder.
"I think they will start to build on these deals and secure new ones in future years as opportunities arise."
With China's oil imports expected to more than double to nine million barrels per day by 2020, energy security will remain the key concern for top leaders in Beijing, said CLSA's Hewitt.
"Security of supply is absolutely essential to the Chinese," he said.
7/05/2010
Phil Falcone's Hedge Fund Adds to Corn Products Stake
Friday, July 2, 2010
After market close yesterday, Phil Falcone's hedge fund Harbinger Capital Partners filed a 13G with the SEC on Corn Products International (CPO). Due to portfolio activity on June 21st, 2010 Harbinger now shows a 5.22% ownership stake in CPO with 3,930,019 shares. This marks an increase in their stake because back on March 31st, Falcone's hedge fund owned 3,483,280 shares of Corn Products when we looked at Harbinger's portfolio. They've added 446,739 more shares to their position over the past three months, a 12.8% increase in shares owned.
Just yesterday, we also detailed how Harbinger has been selling Tate & Lyle shares. This is interesting because both companies are essentially involved in the corn industry in some fashion or another so we'll have to see what Falcone has in mind here.
Taken from Google Finance, Corn Products International, Inc. "manufactures and sells a number of ingredients to a variety of food and industrial customers. The Company is a corn refiner and a supplier of food ingredients and industrial products derived from wet milling and processing of corn and other starch-based materials."
After market close yesterday, Phil Falcone's hedge fund Harbinger Capital Partners filed a 13G with the SEC on Corn Products International (CPO). Due to portfolio activity on June 21st, 2010 Harbinger now shows a 5.22% ownership stake in CPO with 3,930,019 shares. This marks an increase in their stake because back on March 31st, Falcone's hedge fund owned 3,483,280 shares of Corn Products when we looked at Harbinger's portfolio. They've added 446,739 more shares to their position over the past three months, a 12.8% increase in shares owned.
Just yesterday, we also detailed how Harbinger has been selling Tate & Lyle shares. This is interesting because both companies are essentially involved in the corn industry in some fashion or another so we'll have to see what Falcone has in mind here.
Taken from Google Finance, Corn Products International, Inc. "manufactures and sells a number of ingredients to a variety of food and industrial customers. The Company is a corn refiner and a supplier of food ingredients and industrial products derived from wet milling and processing of corn and other starch-based materials."
Agriculturals prove to be as unpredictable as the weather
Agriculturals proved once again why they're as unpredictable as the weather this week.
By Rowena Mason
Published: 9:45PM BST 04 Jul 2010
In particular, the hedge funds might not have called it quite so wrong on corn, if they had watched what's going on outside the window a bit more closely. The grain's price had dropped 20pc this year on good weather in April, suggesting a bumper year of record crops.
This led funds to reverse their net longs and bet that the price of corn would fall on a report from the Chicago Board of Trade, which was set to reveal planting data on Wednesday.
The speculators therefore took a net short position of 39,426 contacts, meaning that early in the week, the price for corn was languishing at around $3.25 per bushel – near the lows of last September's $3 mark.
But they didn't bargain on the planting data showing that around 1m fewer acres had been seeded than previously thought after poor weather in a wet May.
The US Department of Agriculture put the recent decline in planting down to falling temperatures "hampering the planting of the remaining acreage and threatening emerged plants".
At the same time, stockpiles in the warehouses were falling at a much faster rate than last year. Around half of the world's corn comes from the US and it is used for everything from animal feed to oils. One of the longer-term reasons why stocks are falling is the rising use of corn for motor fuels.
These factors caused the biggest one day rise for corn since 1988, which shot up 10pc by Friday, as funds appeared to sell off energy and metals futures to cover their short positions.
Meanwhile, something was afoot in the wheat market as well, driven unsurprisingly by more unexpected weather changes. The concern has been for hot weather in Russia, damaging the crops. Estimated stocks of wheat have swung around unpredictably from more than 100m tons, compared with 97m last year, to what looks like could now be 82m tons if the drought continues.
It came as the commodity market was still reeling from the emergence of a short squeeze in coffee the previous week.
These rising prices had been caused when hedge funds were forced to deliver on contracts they had sold in recent years betting on a fall in coffee prices. It caused a mini-price boom, with investors piling in to take advantage of a 12-year high.
Beneath the scramble of technical buyers, the weather was once again responsible for the shift in coffee's fortunes, as a rise in demand coincided with a predicted 30pc fall in Arabica crops.
These sharp movements and their root causes need to be watched carefully by agriculture investors, says Simon Denham, chief executive of Capital Spreads.
"The only time that softs get into the headlines is when there is a major event (generally a short squeeze) such as is currently occurring in coffee. Sugar went through the same process through 2009 where the price rallied from $310 all the way up to $767, which is the equivalent of oil rallying from the current price all the way up to $190. It's ditto corn in 2008 and wheat in 2007. The one unifying item in each of these events, however, is that the price eventually moves back down pretty much to the starting point. This is logical insofar as these are all grown products and if the future price suddenly doubles then farmers will simply increase the yield in that market more, driving the price back down again."
Longer-term supply and demand trends are one reason why agriculturals can reap steady rewards for investors.
This year, soft commodities have fared badly in comparison with the stellar rises of metal futures. But the sector survived last week's sell-off in energy and metals very well.
According to analysts from Commerzbank, it's partly because they are less sensitive to the effects of a potential second-dip recession.
"Contrary to industrial commodities, agricultural products turn out not to be so dependent on the economy," they said. "This is why they could profit from the weak US dollar."
Many commodity analysts favour agriculturals because of people's need to eat, regardless of the economic austerity.
The longer-term trend of population growth means planting will struggle to keep up with demand, while the effects of climate change mean weather patterns are going to become even more erratic and extreme in future – to the probable detriment of crops.
The United Nations forecasts that the world population will exceed 9bn by 2050, up from about 6.1bn now. The population of developed nations is expected to rise to 1.28bn from 1.23bn, but the number of people in developing nations is expected to leap to 7.9bn from 5.6bn. All of these mouths will need to be fed.
Perhaps the most important factor relates to meat consumption. Richer people eat more meat – and this has a disproportionate effect on agriculture. It has been calculated that, to make one tonne of meat, it takes seven tonnes of corn – plus 7,000 gallons of water. As a society develops and gets richer the demand for grain goes through the roof as more meat is consumed.
This doesn't mean investors should take their eye off the short term. In corn, for example, the good weather in April, replaced by the bad weather in May, is now set to be superceded by good weather again for the rest of the summer. All the talk is now of potentially record yields from the smaller planted area – so beware more sharp price swings as investors jostle to adjust to the likely crop for this year.
Gold: investors take fright at commodity sell-off
Gold bulls had a temporary scare when the market suddenly crashed – before recovering slightly to end the week down 3.5pc.
It lost $40 to $1210 over the week, as investors took fright at the overall commodity sell-off and began to take profit.
At one point on Thursday it had plunged below the symbolic $1200 mark. The 4pc drop marked the biggest one day decline in four months.
The precious metal was under pressure amid renewed talk about a possible double-dip recession and of potential deflation. Some analysts put gold's weakness partly down to aggressive unwinding of the previously popular "long gold, short euro" trade.
By Rowena Mason
Published: 9:45PM BST 04 Jul 2010
In particular, the hedge funds might not have called it quite so wrong on corn, if they had watched what's going on outside the window a bit more closely. The grain's price had dropped 20pc this year on good weather in April, suggesting a bumper year of record crops.
This led funds to reverse their net longs and bet that the price of corn would fall on a report from the Chicago Board of Trade, which was set to reveal planting data on Wednesday.
The speculators therefore took a net short position of 39,426 contacts, meaning that early in the week, the price for corn was languishing at around $3.25 per bushel – near the lows of last September's $3 mark.
But they didn't bargain on the planting data showing that around 1m fewer acres had been seeded than previously thought after poor weather in a wet May.
The US Department of Agriculture put the recent decline in planting down to falling temperatures "hampering the planting of the remaining acreage and threatening emerged plants".
At the same time, stockpiles in the warehouses were falling at a much faster rate than last year. Around half of the world's corn comes from the US and it is used for everything from animal feed to oils. One of the longer-term reasons why stocks are falling is the rising use of corn for motor fuels.
These factors caused the biggest one day rise for corn since 1988, which shot up 10pc by Friday, as funds appeared to sell off energy and metals futures to cover their short positions.
Meanwhile, something was afoot in the wheat market as well, driven unsurprisingly by more unexpected weather changes. The concern has been for hot weather in Russia, damaging the crops. Estimated stocks of wheat have swung around unpredictably from more than 100m tons, compared with 97m last year, to what looks like could now be 82m tons if the drought continues.
It came as the commodity market was still reeling from the emergence of a short squeeze in coffee the previous week.
These rising prices had been caused when hedge funds were forced to deliver on contracts they had sold in recent years betting on a fall in coffee prices. It caused a mini-price boom, with investors piling in to take advantage of a 12-year high.
Beneath the scramble of technical buyers, the weather was once again responsible for the shift in coffee's fortunes, as a rise in demand coincided with a predicted 30pc fall in Arabica crops.
These sharp movements and their root causes need to be watched carefully by agriculture investors, says Simon Denham, chief executive of Capital Spreads.
"The only time that softs get into the headlines is when there is a major event (generally a short squeeze) such as is currently occurring in coffee. Sugar went through the same process through 2009 where the price rallied from $310 all the way up to $767, which is the equivalent of oil rallying from the current price all the way up to $190. It's ditto corn in 2008 and wheat in 2007. The one unifying item in each of these events, however, is that the price eventually moves back down pretty much to the starting point. This is logical insofar as these are all grown products and if the future price suddenly doubles then farmers will simply increase the yield in that market more, driving the price back down again."
Longer-term supply and demand trends are one reason why agriculturals can reap steady rewards for investors.
This year, soft commodities have fared badly in comparison with the stellar rises of metal futures. But the sector survived last week's sell-off in energy and metals very well.
According to analysts from Commerzbank, it's partly because they are less sensitive to the effects of a potential second-dip recession.
"Contrary to industrial commodities, agricultural products turn out not to be so dependent on the economy," they said. "This is why they could profit from the weak US dollar."
Many commodity analysts favour agriculturals because of people's need to eat, regardless of the economic austerity.
The longer-term trend of population growth means planting will struggle to keep up with demand, while the effects of climate change mean weather patterns are going to become even more erratic and extreme in future – to the probable detriment of crops.
The United Nations forecasts that the world population will exceed 9bn by 2050, up from about 6.1bn now. The population of developed nations is expected to rise to 1.28bn from 1.23bn, but the number of people in developing nations is expected to leap to 7.9bn from 5.6bn. All of these mouths will need to be fed.
Perhaps the most important factor relates to meat consumption. Richer people eat more meat – and this has a disproportionate effect on agriculture. It has been calculated that, to make one tonne of meat, it takes seven tonnes of corn – plus 7,000 gallons of water. As a society develops and gets richer the demand for grain goes through the roof as more meat is consumed.
This doesn't mean investors should take their eye off the short term. In corn, for example, the good weather in April, replaced by the bad weather in May, is now set to be superceded by good weather again for the rest of the summer. All the talk is now of potentially record yields from the smaller planted area – so beware more sharp price swings as investors jostle to adjust to the likely crop for this year.
Gold: investors take fright at commodity sell-off
Gold bulls had a temporary scare when the market suddenly crashed – before recovering slightly to end the week down 3.5pc.
It lost $40 to $1210 over the week, as investors took fright at the overall commodity sell-off and began to take profit.
At one point on Thursday it had plunged below the symbolic $1200 mark. The 4pc drop marked the biggest one day decline in four months.
The precious metal was under pressure amid renewed talk about a possible double-dip recession and of potential deflation. Some analysts put gold's weakness partly down to aggressive unwinding of the previously popular "long gold, short euro" trade.
Commodity Funds Trade More, Extend Bets to Fight for Index Money, Man Says
By Chanyaporn Chanjaroen - Jul 2, 2010
Commodity hedge funds are trading more frequently and making bets for later in the future to avoid “getting whipped” by index funds, according to Edwin Garcia, a manager at Man Group Plc, the largest publicly traded hedge-fund company.
Assets under management at index-tracking funds rose 71 percent to $111 billion by the end of May from December 2008, according to Barclays Capital. That “influx of the index money” contributed to price swings in nearby futures, prompting hedge funds to trade more later-dated contracts, Garcia said.
“What the index money has done, it meant hedge funds have had to adjust their trading strategies,” Garcia said in a phone interview on June 29. “Where the managers have strong fundamental views, they are expressing their view further out the curve to avoid getting whipped in the front end.”
Commodity hedge funds lost 4.9 percent in the first five months on average, after declining about 3 percent in 2009, according to Chicago-based Hedge Fund Research Inc. The S&P GSCI Total Return Index tracking the net amount investors received dropped 12 percent from January through May.
Hedge funds are also using more options, Garcia said. On the London Metal Exchange, the world’s largest marketplace of copper and aluminum, trading in options contracts for the six major industrial metals soared 64 percent in May from the same month last year, according to figures on the exchange’s website.
Man Commodity Strategies Ltd., with $1 billion under management in commodity and energy funds, declined 2.7 percent in the first five months, according to information from Garcia. The annual return has been 9.3 percent since the fund started in October 2003. Man Group has $39 billion in assets.
Garcia has been with Man for 11 years, with six years as a portfolio manager. He manages five funds of funds, including Dexion Commodities.
Commodity hedge funds are trading more frequently and making bets for later in the future to avoid “getting whipped” by index funds, according to Edwin Garcia, a manager at Man Group Plc, the largest publicly traded hedge-fund company.
Assets under management at index-tracking funds rose 71 percent to $111 billion by the end of May from December 2008, according to Barclays Capital. That “influx of the index money” contributed to price swings in nearby futures, prompting hedge funds to trade more later-dated contracts, Garcia said.
“What the index money has done, it meant hedge funds have had to adjust their trading strategies,” Garcia said in a phone interview on June 29. “Where the managers have strong fundamental views, they are expressing their view further out the curve to avoid getting whipped in the front end.”
Commodity hedge funds lost 4.9 percent in the first five months on average, after declining about 3 percent in 2009, according to Chicago-based Hedge Fund Research Inc. The S&P GSCI Total Return Index tracking the net amount investors received dropped 12 percent from January through May.
Hedge funds are also using more options, Garcia said. On the London Metal Exchange, the world’s largest marketplace of copper and aluminum, trading in options contracts for the six major industrial metals soared 64 percent in May from the same month last year, according to figures on the exchange’s website.
Man Commodity Strategies Ltd., with $1 billion under management in commodity and energy funds, declined 2.7 percent in the first five months, according to information from Garcia. The annual return has been 9.3 percent since the fund started in October 2003. Man Group has $39 billion in assets.
Garcia has been with Man for 11 years, with six years as a portfolio manager. He manages five funds of funds, including Dexion Commodities.
7/03/2010
Pension funds – future farmers
IPE Magazine – 1 July 2010
Author: Pirkko Juntunen
Pirkko Juntunen records the growing popularity of farmland investment in the developing world
Farmland investing is a phenomenon which has created a lot of controversy and debate. Critics argue that it is a form of colonialism and a land-grab designed to benefit foreign owner’s needs for produce, leaving the indigenous peoples poorer and draining vital resources. Deals, say the critics, are done with governments that do not represent the interests of their people, with local residents bullied off their land. Much of the controversy has come through the involvement of sovereign wealth funds, whereas pension funds have avoided these criticisms.
Those in favour of farmland investing argue that, done correctly, it brings improved resource and land management, improved farming techniques and technology, education and much needed foreign direct investment (FDI) and cash. Many argue that, where foreign investors and local people have a stake in an investment any benefits for the local economy are going to be larger, more sustained and established quicker than foreign aid.
It is inevitable, however, that the worst examples have come under the spotlight. These have involved governments of often undemocratic nations buying or leasing vast areas of land only to grow food using their own labour and export it back to their own countries, without much consideration of the impact on the local people or environment.
Richard Warburton, partner and head of agribusiness at Bidwells Agribusiness, a provider of consultancy and management services, says: “Some unscrupulous deals have taken place. Often in the developing world governments cannot regulate the activities; it is often a question of formal versus informal governance, which leads to conflicts.”
So should institutional investors invest in this asset class at all? What guarantees do they have that it is done in accordance with their responsible investment principles? What about other issues such as land expropriation, coups or war?
The case for farmland is becoming popular as pension fund returns come under pressure from falling returns and slow economic growth. Real assets work as inflation hedges, as in the case of gold and agriculture or food. In the case of agricultural commodities, the prices are driven by issues such as declining global food inventories, rapidly increasing population, the restricted supply of arable land, as well as demand for biofuels. In addition, as countries grow richer their dietary requirements change, with demand for meat increasing. Furthermore, in regions such as sub-Saharan Africa and Eastern Europe, cheap prime farmland yields world-class returns.
At the same time investment returns are not strictly linked to land prices, but to the produce (ie, cashflow) and in the case of private equity funds, the exit strategy as well. Headline numbers of 15-25% annual returns is also something any pension fund would want to explore. These characteristics have caught the interest of Dutch and Nordic funds.
Warburton says farmland is an asset class that provides new opportunities and new risks. Despite the liquidity and scale issues, as evident in Eastern Europe, he has no doubt that the standards will improve and it will become a serious asset class for the institutional market.
Jos Lemmens, senior portfolio manager in the commodities team at APG Asset Management, which manages the assets of Dutch pension fund ABP, says: “For investors with a long-term horizon it is clear that only sustainable investments will yield the highest long-term results. When investing in farmland, it makes no sense to exhaust and deplete the land with unsustainable practices geared towards short-term gains. It is in the investor’s interest to upgrade the land and use sustainable practices.
“Equally, it makes no sense to antagonise the local populace. They will probably provide the workforce and [some] of the final demand for the product. In many cases, investors would have an incentive to provide education and healthcare to the local workforce. In a few selected cases the workforce might even provide a viable exit for the investor by being able to buy the asset at the end of the investment horizon. For APG, it just makes very good business sense to invest in an ecologically and socially sound manner.”
Gary Vaughan-Smith, founding partner at Silver Street, an alternative asset specialist, adds: “The implementation of conservation farming techniques creates sustainable farming businesses, higher crop yields and improved environmental protection. We also have a pro-active programme to train smaller-scale subsistence farmers in these techniques to help improve their yields and lower environmental impact. This programme improves the lives and wealth of subsistence farmers and has a high social impact.”
Paul Christie, head of marketing at Emergent Asset Management, a specialist in alternative assets, says that it is vital to recognise all stakeholders, not just investors. Investment philosophy must be adapted so that objectives are achieved for all the groups involved, be they governmental, private or others. “Informed consent is the key in farmland investing,” he says.
Other Dutch investors are following suit, as are the AP funds in Sweden and Danish funds. In addition, government development finance companies such as FinnFund in Finland, as well as those in Nordic countries, Germany and Switzerland, are teaming up with pension funds and specialist asset managers to invest in the sector. The reputational risk of being caught up in any, even seemingly, unethical business would be enormous.
“In monitoring our investments we employ high standards of corporate governance in order to preserve our clients’ interests,” says Lemmens. “Equally, we require the managers of our farmland investments to adhere to our ethical standards. Investments that do not meet our environmental, social and governance (ESG) criteria will be excluded. It goes without saying that we would never be knowingly involved in forced evictions or depriving local people from any other basic needs. Our selection process for new investments pays special attention towards such social and environmental issues. If at all possible, we have a preference for investments that actively seek to be involved in projects with a high ESG signature.”
Christie has been involved in creating a Voluntary Standards Board with the World Bank. “It is possible for investors to make money but at the same time support the local farmers and self-regulation is the best way,” he comments.
The Food & Agricultural Organization of the UN (FAO) is currently working on guidelines for the farmland investment sector. The guidelines cover the full range of land governance issues – not just large-scale agricultural investments but all land. The guidelines are being developed in an open partnership, with core documentation, expert meetings and a substantial series of regional consultations. The purpose of the consultations is to reach consensus on key issues and, following their completion in September, there will be a period of drafting and e-consultation. The guidelines are expected to be completed in 2011 and implemented from 2012.
In addition to voluntary standards and FAO guidelines, the World Bank’s Multilateral Investment Guarantee Agency (MIGA) also supports and guarantees agri-business on a case-by-case basis. Vaughan-Smith says that it is an extra layer of safety for investors against expropriation and other risks and the advantage of being backed by a supranational is that they provide support and mediation in any case of conflict.
SilverStreet focuses on large-scale commercial farming and technical support for small-scale farmers – its Luxembourg-registered $300m (€244m) fund aims for a 15-20% annual return. The fund is a private equity structure with an exit strategy possibly through an IPO.
Vaughan-Smith says institutional and governmental investors demand high ESG standards for the sector, and that SilverStreet incorporates their requirements and codes into its legal documents. “We differ from other investors in that we buy existing farms and develop them to their full potential. In addition, the produce is intended primarily for the local population so we concentrate on high population areas, which lowers transport costs. This is a different strategy to grabbing big chunks of land to develop export production.”
Author: Pirkko Juntunen
Pirkko Juntunen records the growing popularity of farmland investment in the developing world
Farmland investing is a phenomenon which has created a lot of controversy and debate. Critics argue that it is a form of colonialism and a land-grab designed to benefit foreign owner’s needs for produce, leaving the indigenous peoples poorer and draining vital resources. Deals, say the critics, are done with governments that do not represent the interests of their people, with local residents bullied off their land. Much of the controversy has come through the involvement of sovereign wealth funds, whereas pension funds have avoided these criticisms.
Those in favour of farmland investing argue that, done correctly, it brings improved resource and land management, improved farming techniques and technology, education and much needed foreign direct investment (FDI) and cash. Many argue that, where foreign investors and local people have a stake in an investment any benefits for the local economy are going to be larger, more sustained and established quicker than foreign aid.
It is inevitable, however, that the worst examples have come under the spotlight. These have involved governments of often undemocratic nations buying or leasing vast areas of land only to grow food using their own labour and export it back to their own countries, without much consideration of the impact on the local people or environment.
Richard Warburton, partner and head of agribusiness at Bidwells Agribusiness, a provider of consultancy and management services, says: “Some unscrupulous deals have taken place. Often in the developing world governments cannot regulate the activities; it is often a question of formal versus informal governance, which leads to conflicts.”
So should institutional investors invest in this asset class at all? What guarantees do they have that it is done in accordance with their responsible investment principles? What about other issues such as land expropriation, coups or war?
The case for farmland is becoming popular as pension fund returns come under pressure from falling returns and slow economic growth. Real assets work as inflation hedges, as in the case of gold and agriculture or food. In the case of agricultural commodities, the prices are driven by issues such as declining global food inventories, rapidly increasing population, the restricted supply of arable land, as well as demand for biofuels. In addition, as countries grow richer their dietary requirements change, with demand for meat increasing. Furthermore, in regions such as sub-Saharan Africa and Eastern Europe, cheap prime farmland yields world-class returns.
At the same time investment returns are not strictly linked to land prices, but to the produce (ie, cashflow) and in the case of private equity funds, the exit strategy as well. Headline numbers of 15-25% annual returns is also something any pension fund would want to explore. These characteristics have caught the interest of Dutch and Nordic funds.
Warburton says farmland is an asset class that provides new opportunities and new risks. Despite the liquidity and scale issues, as evident in Eastern Europe, he has no doubt that the standards will improve and it will become a serious asset class for the institutional market.
Jos Lemmens, senior portfolio manager in the commodities team at APG Asset Management, which manages the assets of Dutch pension fund ABP, says: “For investors with a long-term horizon it is clear that only sustainable investments will yield the highest long-term results. When investing in farmland, it makes no sense to exhaust and deplete the land with unsustainable practices geared towards short-term gains. It is in the investor’s interest to upgrade the land and use sustainable practices.
“Equally, it makes no sense to antagonise the local populace. They will probably provide the workforce and [some] of the final demand for the product. In many cases, investors would have an incentive to provide education and healthcare to the local workforce. In a few selected cases the workforce might even provide a viable exit for the investor by being able to buy the asset at the end of the investment horizon. For APG, it just makes very good business sense to invest in an ecologically and socially sound manner.”
Gary Vaughan-Smith, founding partner at Silver Street, an alternative asset specialist, adds: “The implementation of conservation farming techniques creates sustainable farming businesses, higher crop yields and improved environmental protection. We also have a pro-active programme to train smaller-scale subsistence farmers in these techniques to help improve their yields and lower environmental impact. This programme improves the lives and wealth of subsistence farmers and has a high social impact.”
Paul Christie, head of marketing at Emergent Asset Management, a specialist in alternative assets, says that it is vital to recognise all stakeholders, not just investors. Investment philosophy must be adapted so that objectives are achieved for all the groups involved, be they governmental, private or others. “Informed consent is the key in farmland investing,” he says.
Other Dutch investors are following suit, as are the AP funds in Sweden and Danish funds. In addition, government development finance companies such as FinnFund in Finland, as well as those in Nordic countries, Germany and Switzerland, are teaming up with pension funds and specialist asset managers to invest in the sector. The reputational risk of being caught up in any, even seemingly, unethical business would be enormous.
“In monitoring our investments we employ high standards of corporate governance in order to preserve our clients’ interests,” says Lemmens. “Equally, we require the managers of our farmland investments to adhere to our ethical standards. Investments that do not meet our environmental, social and governance (ESG) criteria will be excluded. It goes without saying that we would never be knowingly involved in forced evictions or depriving local people from any other basic needs. Our selection process for new investments pays special attention towards such social and environmental issues. If at all possible, we have a preference for investments that actively seek to be involved in projects with a high ESG signature.”
Christie has been involved in creating a Voluntary Standards Board with the World Bank. “It is possible for investors to make money but at the same time support the local farmers and self-regulation is the best way,” he comments.
The Food & Agricultural Organization of the UN (FAO) is currently working on guidelines for the farmland investment sector. The guidelines cover the full range of land governance issues – not just large-scale agricultural investments but all land. The guidelines are being developed in an open partnership, with core documentation, expert meetings and a substantial series of regional consultations. The purpose of the consultations is to reach consensus on key issues and, following their completion in September, there will be a period of drafting and e-consultation. The guidelines are expected to be completed in 2011 and implemented from 2012.
In addition to voluntary standards and FAO guidelines, the World Bank’s Multilateral Investment Guarantee Agency (MIGA) also supports and guarantees agri-business on a case-by-case basis. Vaughan-Smith says that it is an extra layer of safety for investors against expropriation and other risks and the advantage of being backed by a supranational is that they provide support and mediation in any case of conflict.
SilverStreet focuses on large-scale commercial farming and technical support for small-scale farmers – its Luxembourg-registered $300m (€244m) fund aims for a 15-20% annual return. The fund is a private equity structure with an exit strategy possibly through an IPO.
Vaughan-Smith says institutional and governmental investors demand high ESG standards for the sector, and that SilverStreet incorporates their requirements and codes into its legal documents. “We differ from other investors in that we buy existing farms and develop them to their full potential. In addition, the produce is intended primarily for the local population so we concentrate on high population areas, which lowers transport costs. This is a different strategy to grabbing big chunks of land to develop export production.”
7/02/2010
Anchor Point Launches Commodity Fund Of Funds
Jul 2 2010 | 11:27am ET
Anchor Point Capital is branching out with a fund of commodities hedge fund.
The new fund is Anchor Point’s third, following its global macro and hedged equity vehicles. The $121 million firm netted $18 million from institutional investors for the launch, including a large university endowment and a private foundation, according to Pensions & Investments.
The Anchor Point fund features 11 underlying managers. It includes both general commodity funds and sector specialists, the firm told investors in a letter.
Anchor Point Capital is branching out with a fund of commodities hedge fund.
The new fund is Anchor Point’s third, following its global macro and hedged equity vehicles. The $121 million firm netted $18 million from institutional investors for the launch, including a large university endowment and a private foundation, according to Pensions & Investments.
The Anchor Point fund features 11 underlying managers. It includes both general commodity funds and sector specialists, the firm told investors in a letter.
Afrique : Bill Gates offre 120 millions $ pour l'agriculture
24-10-2009
La Fondation Bill et Melinda Gates a fait un don de 120 millions de dollars pour le développement de plusieurs projets agricoles et de sécurité alimentaire en Afrique.
Le fondateur de Microsoft, Bill Gates, a annoncé cette initiative lors du Symposium pour le Prix mondial de l'alimentation, qui s'est tenu dans l'Iowa, aux Etats-Unis.
Le milliardaire américain a souligné, que « si nous pouvons aider un petit producteur africain à être davantage productif et ainsi gagner plus d'argent, nous allons ainsi faire des pas de géants dans la lutte contre la faim et la pauvreté dans le monde. »
L'organisation de développement Alliance pour une révolution verte en Afrique (AGRA), l'une des organisations bénéficiaires de ce don, a annoncé avoir reçu 15 millions de dollars pour soutenir des politiques agricoles dans cinq pays africains, l'Ethiopie, le Ghana, le Mali, le Mozambique et la Tanzanie.
La Fondation Bill et Melinda Gates a fait un don de 120 millions de dollars pour le développement de plusieurs projets agricoles et de sécurité alimentaire en Afrique.
Le fondateur de Microsoft, Bill Gates, a annoncé cette initiative lors du Symposium pour le Prix mondial de l'alimentation, qui s'est tenu dans l'Iowa, aux Etats-Unis.
Le milliardaire américain a souligné, que « si nous pouvons aider un petit producteur africain à être davantage productif et ainsi gagner plus d'argent, nous allons ainsi faire des pas de géants dans la lutte contre la faim et la pauvreté dans le monde. »
L'organisation de développement Alliance pour une révolution verte en Afrique (AGRA), l'une des organisations bénéficiaires de ce don, a annoncé avoir reçu 15 millions de dollars pour soutenir des politiques agricoles dans cinq pays africains, l'Ethiopie, le Ghana, le Mali, le Mozambique et la Tanzanie.
Duet Group Launch The Duet Commodities Fund
posted by hallty on Thursday 1 Jul 2010 12:18 GMT
Duet Group, the global financial group specializing in Alternative Asset Management is delighted to announce the launch of the “Duet Commodities Fund” on the 1 July 2010.
Tony Hall, Chief Investment Officer of the “Duet Commodities Fund”, will be managing the Fund with his team of product specialists who will be focusing on Metals and Agricultural Trading whilst Tony will focus on Energy. Tony is a high calibre professional who brings over 10 years of experience. Prior to joining Duet Group, Tony was Global Head of Distillates Oil Trading at Credit Suisse-Glencore from 2008 to 2010, looking at opportunities in the commodities derivatives market. His approach was directional and option-based. From 2001 to 2008 Tony worked for Deutsche Bank where he was Global Head of Middle Distillate Oil Trading and previously a Macro Proprietary Trader. During this time he traded a portfolio of FX, Commodities and Fixed Income products consisting of spot, forward, futures and options positions.
Tony obtained a BSc Honours degree in Economics from the University Of Bath specialising in Econometrics, Mathematical Economics, Financial Markets and Portfolio Management.
Arno Pilz, Head of Metals Trading of the “Duet Commodities Fund”, will be in charge of Metals Trading globally. Arno brings with him over 16 years of trading experience. Prior to joining, Arno was Global Head of Metals Trading at both Lehman Brothers and UBS. He also brings with him many years of experience in G10 and Emerging Markets FX derivatives trading. His approach was both directional and relative value based.
Arno obtained a MPhil in Management Studies from Oxford University as well as a BTech from the University of Limerick.
The “Duet Commodities Fund” will focus on detecting superior sources of returns in all commodities with emphasis on energy, metals and foreign exchange. A fundamental approach is used with macro-economic and physical market information, combined with various technical market indicators to generate fair values, forecasts and trading signals for commodity prices.
Alain Schibl, Co-Founder of Duet Group, says: “We believe in the long term attractiveness of investing in commodities particularly in current market volatility which offers opportunities to generate high returns. We are delighted by the launch of this Fund and to have the addition of such a talented and experienced individual to run it. We believe that having a Commodity Fund is significant in taking the firm to the next stage.”
Tony Hall, CIO of the “Duet Commodities Fund”, added: “I am delighted to be joining one of the most dynamic Alternative Investment firms. I believe that we have an edge that will help differentiate us through our extensive network, ability to understand today’s market, access a solid global infrastructure, an in-depth understanding of all of the variables impacting prices and an excellent reputation in forecasting macro trends.”
For more information please contact: Anahita Firouzbakht;
afirouzbakht@duetgroup.net; +44 (0)20 7290 9800
Duet Group, the global financial group specializing in Alternative Asset Management is delighted to announce the launch of the “Duet Commodities Fund” on the 1 July 2010.
Tony Hall, Chief Investment Officer of the “Duet Commodities Fund”, will be managing the Fund with his team of product specialists who will be focusing on Metals and Agricultural Trading whilst Tony will focus on Energy. Tony is a high calibre professional who brings over 10 years of experience. Prior to joining Duet Group, Tony was Global Head of Distillates Oil Trading at Credit Suisse-Glencore from 2008 to 2010, looking at opportunities in the commodities derivatives market. His approach was directional and option-based. From 2001 to 2008 Tony worked for Deutsche Bank where he was Global Head of Middle Distillate Oil Trading and previously a Macro Proprietary Trader. During this time he traded a portfolio of FX, Commodities and Fixed Income products consisting of spot, forward, futures and options positions.
Tony obtained a BSc Honours degree in Economics from the University Of Bath specialising in Econometrics, Mathematical Economics, Financial Markets and Portfolio Management.
Arno Pilz, Head of Metals Trading of the “Duet Commodities Fund”, will be in charge of Metals Trading globally. Arno brings with him over 16 years of trading experience. Prior to joining, Arno was Global Head of Metals Trading at both Lehman Brothers and UBS. He also brings with him many years of experience in G10 and Emerging Markets FX derivatives trading. His approach was both directional and relative value based.
Arno obtained a MPhil in Management Studies from Oxford University as well as a BTech from the University of Limerick.
The “Duet Commodities Fund” will focus on detecting superior sources of returns in all commodities with emphasis on energy, metals and foreign exchange. A fundamental approach is used with macro-economic and physical market information, combined with various technical market indicators to generate fair values, forecasts and trading signals for commodity prices.
Alain Schibl, Co-Founder of Duet Group, says: “We believe in the long term attractiveness of investing in commodities particularly in current market volatility which offers opportunities to generate high returns. We are delighted by the launch of this Fund and to have the addition of such a talented and experienced individual to run it. We believe that having a Commodity Fund is significant in taking the firm to the next stage.”
Tony Hall, CIO of the “Duet Commodities Fund”, added: “I am delighted to be joining one of the most dynamic Alternative Investment firms. I believe that we have an edge that will help differentiate us through our extensive network, ability to understand today’s market, access a solid global infrastructure, an in-depth understanding of all of the variables impacting prices and an excellent reputation in forecasting macro trends.”
For more information please contact: Anahita Firouzbakht;
afirouzbakht@duetgroup.net; +44 (0)20 7290 9800
7/01/2010
Galena Up 4.2% In May As Most Commodity Funds Swoon
Jul 1 2010 | 11:51am ET
Galena Asset Management bucked the commodities hedge fund trend in May with a big gain, while most its fellow commodity hedge funds suffered drawdowns.
London-based Galena’s $700 million commodity fund jumped 4.2% in May, its best return of the year. While the average commodity fund dropped by more than 1.5% on the month, Galena saw its bullish bet on gold and bearish bet on copper pay off. The fund is now up 8% on the year, Bloomberg News reports.
By contrast, BlueGold Capital Management lost 12.5% in May, Armajaro Asset Management lost 8.8%, Clive Capital lost 6%, and Touradji Capital Management lost about 5%.
Galena Asset Management bucked the commodities hedge fund trend in May with a big gain, while most its fellow commodity hedge funds suffered drawdowns.
London-based Galena’s $700 million commodity fund jumped 4.2% in May, its best return of the year. While the average commodity fund dropped by more than 1.5% on the month, Galena saw its bullish bet on gold and bearish bet on copper pay off. The fund is now up 8% on the year, Bloomberg News reports.
By contrast, BlueGold Capital Management lost 12.5% in May, Armajaro Asset Management lost 8.8%, Clive Capital lost 6%, and Touradji Capital Management lost about 5%.
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