Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
The unleveraged, unlisted and long-only product has a five-year renewable tenor and gives access to prices of direct investments in 19 commodities across four sectors: precious metals, industrial metals, grains and tropical staple commodities, which jointly constitute the Mother Earth Index.
Neither oil, gas nor gasoline are included. The certificateÆs net asset value is calculated daily and published on Reuters and Bloomberg.
Thirty-two per cent of the index is weighted towards tropical goods, such as sugar, coffee, rubber and cocoa, and another 18% towards grains. This fits with one of JansenÆs key themes, namely the upside that he predicts for biofuels, including ethanol for cars and biodiesel for trucks, buses and power stations. He believes this will create an impetus for demand of commodities of this nature.
ôThe invention of the flex-fuel engine is just as important as the invention of the Internet,ö says Jansen. Pointing out that crude oil takes millions of years to create, and that agro energy takes only a few months, he adds: ôWorld raw sugar futures were at 25-year highs in February, but sugar itself is still cheap. Thirty years ago it traded at 40 cents a pound, today you can buy it at 16 cents. The upward potential is enormous.ö
Fees for the certificate include a 1% sales commission, a management fee of 1.7% per year and a 15% performance fee with a high-water mark.
Complementing this certificate is the Mother Earth Resources Fund, which was established in July 2004, has $50 million under management and targets minimum returns of 15-20%.
The fund is managed actively around the constituents of the Mother Earth Index and Mother Earth Ex-Energy Index. Investors in the fund currently include high-net-worth individuals, family offices, two pension funds and a selection of banks.
The fundÆs Sharpe ratio is 0.53% and its standard deviation is 16.3%. The fund administrators are ABN Amro and Global Fund Services, which is a subsidiary of the custodian bank Liechtensteinische Landesbank. The accountants for the fund are PricewaterhouseCoopers.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
CDPQ's Ivanhoe Cambridge hires ex-GIC real estate expert; NZ Super adds board member; Future Fund appoints chief people officer; BlackRock real estate CIO joins Singapore's Capitaland; AMP Capital hires MD for energy; Northern Trust AM names new CIO; T Rowe Price hires AU and NZ institutional head; Nuveen hires Southeast Asia institutional head; Citi names sustainability head in Singapore; and more
Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains