Ex-JP Morgan and BNP execs launch commodity hedge fund
Singapore-based Four Elements Capital has launched the Earth Element Fund with a long/short commodity futures strategy.
New Singapore-based fund manager Four Elements Capital has established a new long/short commodity futures fund. The Earth Element Fund soft launched in December 2008. It targets an absolute return of over 20% per annum on volatility of 15%.
The CIO of the fund is Lionel Semonin, who used to work as a managing director at JP Morgan and BNP Paribas, building their global commodity investor businesses. He is joined by former JP Morgan colleagues Bertrand Egsbaek and Leila Kuhlenthal, who handle execution/risk management and investor relations/compliance respectively. The fourth element in the team is researcher Marion Lefevre, formerly of BNP Paribas.
The fund soft launched with $8 million in assets and currently has a $500 million capacity. It offers monthly liquidity and no lock-up.
The strategy is to use both fundamental and quantitative analysis in order to take long and short positions on a large set of commodity futures contracts across energy, agricultural commodities, precious and base metals. They will trade within eight to nine exchanges and stick to exchange-traded futures, therefore reducing counterparty issuer risks.
The fund can use maximum leverage equating to 200% notional contract exposure. The average gross positions have been in the 150% region but with no net long/short bias over a reasonable period of time û although the range of net exposure can be anywhere between plus to minus 200%. Fees for the fund include a 2% management fee and a 20% performance fee.
The CIO of the fund is Lionel Semonin, who used to work as a managing director at JP Morgan and BNP Paribas, building their global commodity investor businesses. He is joined by former JP Morgan colleagues Bertrand Egsbaek and Leila Kuhlenthal, who handle execution/risk management and investor relations/compliance respectively. The fourth element in the team is researcher Marion Lefevre, formerly of BNP Paribas.
The fund soft launched with $8 million in assets and currently has a $500 million capacity. It offers monthly liquidity and no lock-up.
The strategy is to use both fundamental and quantitative analysis in order to take long and short positions on a large set of commodity futures contracts across energy, agricultural commodities, precious and base metals. They will trade within eight to nine exchanges and stick to exchange-traded futures, therefore reducing counterparty issuer risks.
The fund can use maximum leverage equating to 200% notional contract exposure. The average gross positions have been in the 150% region but with no net long/short bias over a reasonable period of time û although the range of net exposure can be anywhere between plus to minus 200%. Fees for the fund include a 2% management fee and a 20% performance fee.
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