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Alternative Market Briefing

Highlight on energy (4) – FoHFs Culross looking for lower vol hedge funds

Friday, February 05, 2010

Benedicte Gravrand, Opalesque London:

Culross is a fund of hedge funds manager that now allocates to energy hedge funds.

Energy, whether traditional or new, has provoked heated debates since the awareness of global warming and peak oil came to the fore. These funds try to take advantage of price discrepancies that these markets provide or of new opportunities arising in the nascent market of renewables.

The HFRI Energy/Basic Materials Index was one of HFR’s top performing indices in 2009 when it returned 41.39%. The index has approximately 70 constituents, HFR told Opalesque. The same index was down 38.3% in 2008 (the worst performer that year) and up 16.4% in 2007 (the top performer that year). The Dow Jones-UBS Energy Sub-index is now down 8.21% YTD and was down 5.30% in 2009.

Our fund manager today is Culross Global Management, a London-based FoHFs manager who introduced the energy theme for the first time last year in two of its FoHFs; the Global Fund and the H Fund (see our Dec-09 Opalesque Exclusive: London manager Culross launches FoHFs with liquidity terms worse than most hedge funds - here).

The global issue According to an internal memorandum issued late last year by Culross, the managers see that one of the distinctive characteristics of the Bush era was the U.S. Administration’s stubborn attitude towards......................

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