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Opalesque Exclusive: High risk Iraqi-focused fund returns 10.3% in February amid signs of political progress Benedicte Gravrand, Geneva: Godvig Capital Management’s Babylon Fund, an open-ended mutual fund with 2/20 fees and a hurdle rate of 8%, has done very well so far: 26.4% since its September 2006 inception (24% 12MTD).

In February, the managers experienced a nice strong rebound, thereby reviving their long-term uptrend. All asset classes in the portfolio contributed: Iraqi bond yields fell, equity prices of oil drilling companies rose, as did banking stocks on the Iraqi stock exchange. Beyond the helping hand of record high oil prices, also the organic profit explosion in Iraq, rising expectations of double digit growth with low inflation and signs of political progress are feeding the market sentiment.

With a minimal market cap of $2.2 bln - and turnover rising 250% in a year - the doorway of the ISX might soon be getting crowded. It is exciting to find the days are gone when the managers were the lone foreigners on the trading floor in Baghdad. During the month the managers maintained their prime investment strategy to increase their fund's exposure in a broad-based manner into what they regard as undervalued blue chips on the Iraqi Stock Exchange.

The managers’ aim is to provide long-term capital growth from an investment portfolio consisting of Iraqi and Iraqi-dependant securities. Corporate web......................

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