Dull The Next Leg of The Uranium Bull Run I Building.... Shorters Be Prepared Here's a nice read concerning another Hedge Fund In Preparation For The Next Leg :) _____________________________________________________________________
INTERVIEW Energy hedge fund Sector eyes uranium for commodities supercycle play
By Ingrid Smith Tue, 15 Apr,2008 14:33 GMT
CEO Damaskos said there is a 'compelling case' for re-rating the uranium sector which has seen a triple rise in price over a three year period.
LONDON (Thomson IM) - Sector Investment Managers Ltd, an energy focused fund manager, is making moves to join a new breed of players in the commodities hedge fund arena as the energy supercycle continues at a pace.
And Angelos Damaskos, CEO and Investment Advisor at Sector, told Thomson Investment management News that his firm is keeping its focus on inefficient markets such as the uranium sector.
He said: 'Having followed the uranium sector for a while, we believe that the uranium miners have been particularly hard hit by the equity market weakness.'
He said uranium prices have risen by two or three times in three years - whereas equities in the sector are more or less flat over the same period. He argues this is a 'very compelling case' for potential re-rating of the sector in the future.
Uranium spot prices hit as high as $140 a pound last year before falling back to about $75 in March. The spot price had been at about $35 in 2005.
Specialist firm Uranium Resources seems to support Damaskos' theory. Its share price has fallen slightly over the last three years, while more diversified mining company Rio Tinto PLC has seen its shares more than triple in value in the same period.
Damaskos' company runs two open-ended products and one segregated account. One of its open-ended vehicles - the Junior Energy Fund - is a Cayman islands registered hedge fund, which since it's launch in August 2006 to February 2008 has returned 44.9 percent, Damaskos said.
The fund invests in energy resource rich companies.
Damaskos now wants to build on this 'outperformance' to attract previously elusive institutional investors.
The current size of Sector, with assets under management of around $69 million, has so far precluded institutional interest.
However, Damaskos hopes the relationship it sealed with Societe Generale's prime brokerage business, Newedge, at the end of March will allow the firm to take a greater role in the commodities arena - along side other new players like BlueGold Capital and Clive Capital.
BlueGold, launched in February, is a hedge fund with a consortium management team which includes Goldman Sachs, while Clive is a commodity trading hedge fund, launched in December 2007 and run by former star trader Christian Levett.
As two of the newest hedge funds to play the energy supercycle investment game - operating natural resource-focused strategies - BlueGold was up 30 percent in its first month on the back of surging commodity and energy prices.
Clive meanwhile gained around 15 percent and has reported a growth in assets of $1.3 billion on the back of net returns for the first three months of 21.6 percent.
And, the more established funds are of course not missing out on the opportunities; RAB Capital's relatively new vehicle - the RAB Global Mining & Resources commodities hedge fund, which was launched in November 2007 and is run by Philip Richards - saw a 15 percent increase during February.
As an investor in energy equities, Damaskos said Sector's future focus will be on the fundamental value of holdings.
'We do not sell in a panic when the market is weak... when (other) investors sell indiscriminately,' he said.
He added, he remains quite confident and optimistic that the energy supercycle will continue to elevate commodity prices to even higher levels.
'The fundamental value of our holdings remains unchallenged,' he said.
However, Lehman Brothers' analysts, in an energy report published this month, are less positive on the longevity of the supercycle.
The report said: 'Based on our analysis of physical markets and financial flows, we expect oil prices to weaken significantly through the rest of this decade, after peaking in 2008.'
Lehmans said that although it is raising its 2008 oil price estimates - because it believes the estimates for for financial demand for oil and commodities have been too low - it does not discount its original view in 2007.
This is that the factors which have propelled the upward march of prices since 1998 will not continue past this year.
. . Cheers from grant64 :) . . .
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