Highbridge launches European retail commodities fund
Highbridge Capital Management, one of the world’s largest hedge funds, is the latest to tap European retail investors by launching a Ucits commodities fund.
The $19bn asset management arm of J.P. Morgan Asset Management says investor demand led it to launch Highbridge Diversified Commodities fund, giving investors access to commodities futures in Ucits format.
The six managers of the long-biased portfolio, headed by Sassan Alizadeh and Mark Nodelman, will invest in 25 to 30 of the most liquid, major commodities via futures markets.
To satisfy Ucits restrictions on commodities exposure, they will use a total return swap.
Jasper Berens, head of UK retail sales at J.P. Morgan Asset Management, said this method of gaining exposure to pure commodities meant investors would take only commodity, not also equity risk.
“While equity sectors overall are generally more correlated to each other and influenced by economic and market trends, the performance of individual commodities tend to be dominated by their own supply and demand dynamics,” he added.
Commodities prices have risen amid growth in demand from emerging markets, notably China which is simultaneously the world’s largest consumer and producer of them.
Highbridge cited Opec forecasts that demand for fuel in emerging Asia will rise 87% by 2030, fuelled by strong growth in China’s car market.
Agricultural commodities are also at all-time highs, after grains jumped by 80% last year.
But some managers, including DekaBank and Pimco, predict falls in this sector over the coming year.
Commodities-focused funds have found favour since the crisis, having made 14% in 2008 according to BarclayHedge, when global shares fell about 43%.