FOCUS ON JUNIORS AND EXPLORERS Swiss fund to increase platinum holdings with second PGM fund Swiss fund manager BAC plans to lauch a second platinum fund focusing on platinum juniors and explorers in South Africa and Africa. It wants to increase current platinum holdings.
Author: Tessa Kruger Posted: Friday , 11 Apr 2008
JOHANNESBURG -
Swiss Best Asset Class (BAC) fund managers plan to launch their second platinum fund focusing on platinum juniors and explorers in South Africa and Africa in a few months to increase their current positions in platinum juniors.
Fund manager Bernard Loriol told Mineweb today the company would launch a second platinum fund, the BAC Platinum Group Metals Fund, as soon as it managed to raise $55m initial capital in the Middle East. BAC would then list the fund in Luxembourg in order to sell it to Europeans.
Loriol said the motivation behind the launch of the second fund was the asset managers' desire to increase their current holdings in the platinum companies, while it has already reached investment limits of 10% of market capitalisation equity with the first "Bushveld" fund.
The first Bushveld platinum fund's top three holdings were Anooraq Resources (TSXV: ARQ; AMEX: ANO; JSE: ARQ), Wesizwe (JSE:WEZ) and Platinum Australia (ASX:PLA, AIM:PLAA). The fund manager said the companies were undervalued and made good acquisition targets for Asian money seeking platinum assets.
He said the platinum companies BAC invested in were aware of its strategy to increase its holdings in these companies. BAC believed its planned larger holdings in the companies would support share prices.
The company's strategy was to remain invested in the undervalued companies for three to four years before selling its interest to a major player such as Xstrata or possible interested buyers from Asia at a premium.
The first BAC platinum fund attained growth of 6% in rand terms and a negative 20% in Swiss Franc terms in the first quarter compared to average annual growth of 41% in rand terms since its launch in October 2004.
Loriol attributed the lower performance in the first quarter to the strengthening of the Swiss Franc, as the fund did not hedge against strength in the currency, and a drop in Anooraq's share price, which it still expects to perform.
However, the asset managers still expected the fund to perform in future on the basis that the platinum juniors were undervalued and that interest from Xstrata, China and other major companies was expected to lead to corporate action.
Related Links ARTILCES: BAC Platinum Fund top holdings in juniors as consolidation set to accelerate Competition for platinum juniors heats up – BAC Fund
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