Global Advisors, the specialist commodities alternative asset manager, has launched the Global Precious Metals Fund. The offer period opened yesterday for the fund, which is aimed at professional investors, small funds of hedge funds, and family offices.
“The Global Precious Metals Fund offers investors a fresh approach to investing in precious metals,” says Russell Newton, the fund manager and CEO of Global Advisors. “The fund will take positions in mining equities and unlike most funds, will also place strong emphasis on investment in the underlying commodities. The fund will take both long and short positions, rather than simply remain net long under all market conditions.
We have a great team behind the fund with unparalleled experience; The fund benefits from unique insight into precious metals fundamentals through its association with Philip Klapwijk as well as first-class research on small and mid-cap mining stocks from Robert van Doorn.”
Global Advisors will use Philip Klapwijk, the Managing Director of GFMS, the leading research firm in precious metals markets to provide views and market analysis. Robert van Doorn, formerly the senior gold equities analyst at Morgan Stanley, provides research to the fund on mining stocks, including under-researched junior and exploration companies.
The Global Precious Metals Fund combines different investment styles including a top down approach (e.g. correlation with USD and global macro climate), a bottom-up approach (e.g. under-followed stocks, proprietary valuation models) and relative value strategies.
The Global Precious Metal Fund trades in a diversity of markets including precious metals mining equities, underlying precious metals (spot, forward, derivatives) and relevant equity index derivatives such as the XAU*.
Global Advisors conducted extensive research among existing funds specialising in precious metals, the vast majority of which are long-only. The 37 long-only funds with long track records selected for further study had strong performance over the last four years with average rates of returns of 21.7%, although this was achieved with high volatility (30.9%). Over 10 years only seven funds returned more than 5% annually and this again was accompanied by huge volatility. For the few precious metals hedge funds where performance is available, results were marginally better but in many cases returns looked remarkably similar to the long-only funds. By contrast, the aim of the Global Precious Metals Fund is to produce returns well in excess of the risk free rate, under all market conditions and on a much lower annualised volatility than that typical for long-only funds.
Russell Newton says that “a key difference with the Global Precious Metals Fund is that we are not “Gold bugs” trapped by either mandate or mindset into being 100% long. We benefit from extensive precious metals and equity research capabilities as well as invaluable risk and portfolio management skills which we are confident will enable us to deliver superior returns for our clients. The greatly enhanced precious metals research capability is also expected to benefit investors in our existing energy & metals fund (the Global Advisors Commodity Investment Fund) which is managed exclusively by co-principal of Global Advisors, Daniel Masters”