French trio to launch Belaco commodities fund
In a year when many commodity investors have been disappointed with their returns, senior managers in the commodities division of Societe Generale are leaving the French bank to launch Belaco Capital, to help put this to right.
The discretionary hedge fund will be managed from Paris, and is expected to launch in the fourth quarter of 2012.
Frédéric Lasserre, who headed the SG commodity research and strategy team, has worked for 15 years with Christophe Cordonnier, who established and headed the bank’s sales and structuring commodity investor business. They will join François Beuzelin, who headed up metals trading at the bank before working for a commodity fund for the past two years.
Cordonnier said there was “still unsatisfied demand from investors for absolute return on commodities”.
There certainly has been over recent years.
The S&P GSCI spot index – a broad measure of commodities prices – is back where it was shortly before Lehman Brothers collapsed, and around the same level it crossed around the end of 2007.
Since mid-2008, it has rarely been higher than its current level.
While model-driven funds called Commodity Trading Advisors (CTAs) managed to make 14% for their investors that year, this was largely due to their investments outside commodities, which lost about two thirds of their value that year.
This year the S&P GSCI is down 0.45%, and fell 5.5% this month to 10 May.
But it was not an across-the-board fall in the first two weeks of the month.
S&P GSCI Petroleum was up 1.5%; natural gas was 30.3% lower; and the S&P GSCI Agriculture index was 5.25% down.
Lasserre said: “We believe it is crucial to rely on solid expertise in trendless and highly volatile markets we experience during recessionary times”
Beuzelin said: “We think the combination of trading, fundamental research and financial engineering is the ideal mix to bring value to investors.”
Belaco’s fund is expected to be launched in the fourth quarter of this year.