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"We are seeing more and more multi-strategy fund managers adding commodities to their portfolios" Ben Jackson, Kiodex |
According to SunGard Kiodex, a web-based commodities risk management platform for financial institutions, commodity hedge funds are rising in number. The most recent evidence comes from Citigroup, which is reportedly seeking to raise up to $2 billion for two new hedge funds that will be managed by the US bank’s energy trading subsidiary, Philbro. Leslie Barbagallo is a senior vice-president at Kiodex, where her responsibilities include assisting hedge funds and their investors with risk management due diligence. She says that, according to Kiodex’s listings, over the 20 months from September 2005 to May 2007, the number of hedge funds trading commodities (including multi-strategy) grew by 63% (39% annualized). There are now an estimated 300 hedge funds that specialize in trading commodities, and a growing number of multi-strategy funds that are adding expertise in commodities trading.
Ben Jackson, COO and head of Kiodex, says: "We are seeing more and more multi-strategy fund managers adding commodities to their portfolios. The reasons vary from creating relative-value plays to adding assets that aren’t necessarily correlated to the returns and volatility of the other asset classes in their portfolios.
