State Street has been appointed custodian to the recently launched Neuberger Berman Enhanced Commodities Qualifying Investor Fund. The Royal Borough of Windsor and Maidenhead, the administering authority for The Royal County of Berkshire Pension Fund, has seeded the Fund with an investment of approximately 45 million.
The Fund is a sub-fund of the Neuberger Berman Qualifying Investor Funds plc, a Dublin-domiciled fund structure.
The Fund provides long-only, enhanced commodity exposure via commodity futures with equal weightings in Agriculture, Energy, Precious and Industrial Metals. Structured as a Qualifying Investor Fund (QIF), the Fund is regulated and approved by the Irish Financial Services Regulatory Authority.
Neuberger Berman, a leading privately held, employee-controlled independent money manager, launched the fund on August 28, 2009.
Neuberger Berman Europe Limited is the investment manager with Neuberger Berman Alternative Fund Management as sub-manager and Gresham Investment Management LLC (Gresham) acting as the ultimate sub-advisor. The weights of the individual commodities in each sector are determined by production and liquidity criteria according to Greshams proprietary strategy. In addition, Gresham uses its Term Structure Monetization model to determine the optimal point on the term structure to invest for each commoditys future contract.
Gresham has been successfully managing commodity strategies since 1987 and similar Term Structure strategies since 2004. The collateral is managed by Neuberger Bermans Fixed Income Team in Chicago and New York, while the Global Fixed Income and Currency Team in London is responsible for currency hedging.
Edward Jones, head of UK institutional business at Neuberger Berman Europe, said, “We are delighted that the Berkshire Pension Fund has made an allocation to the Neuberger Berman Enhanced Commodities Fund, which gives investors access to a diversified pool of the more liquid commodities. Unlike many commodities funds and indices, the frequently dominant energy weighting is capped at 25%, thus further improving diversification and reducing volatility.”