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New Managers November 2017

PROFILES: Arion Investment Management, Navy Capital

Arion Investment Management launches first commodities fund

Investors are taking a closer look at commodities funds. With equities hitting new highs week after week, cautious investors have started to look for opportunities that are uncorrelated to the broad market as a hedge against a potential correction. The trend has been a boon for commodities managers, many of which are seeing positive flows for the first time in years despite recent underperformance. New commodities funds are also popping up.

Earlier this month, London-based Arion Investment Management launched its maiden strategy, the Raptor Commodities Fund, a relative value commodity trading program focused on base and precious metals. "We see a significant opportunity in this space because the banks have left and many funds have closed," says James Purdie Head of Investor Relations at Arion in an interview with Opalesque New Managers . "Investors that are returning to commodities will find a different landscape of managers and capabilities. We think we can offer skill in this space, which is harder to find today."

Darius Tabatabai will act as portfolio manager for the strategy. Tabatabai, who served in various trading roles at UBS, Credit Suisse and Bank of America Merrill Lynch, has a background in trading precious metals, base metals, and FX Options

For Arion's new fund, Tabatabai will be looking for inefficiencies in the commodities market and making directional trades. According to Purdie, the fund will make 5-10 of these directional trades per year alongside copper arbitrage and other options bets that will generate a steady baseline return for the fund.

2018 could be an interesting first year for the fund. In a recent research note first reported by Bloomberg, JP Morgan highlighted opportunities in aluminum, but said that......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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