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Cargill prepares for hedge fund launches in 2004

Cargill, the largest private company in the US, has quietly launched a new hedge fund company, Black River Asset Management LLC (Black River).

With revenues of USD 60 billion, the Minnesota-based agricultural giant is involved in everything from soy production to pet food and is a dominant player on the world's commodities exchanges.

Now the famously discreet Cargill has entered the world of hedge funds with the launch of Black River Asset Management. The new company will have its initial funds up and running in the first half of 2004 and will target institutional investors.

No newcomer to asset management, Cargill already handles USD 12 billion of its own assets through its Global Capital Markets (GCM) group. It also has a futures brokerage business and a value investment business that manages portfolios of loans, real estate and corporate credit.

The recent formation of this new entity by Cargill's GCM group is part of Cargill's plan to leverage its proprietary trading expertise by creating alternative investment products for institutional investors.

Kok-Ying Lee, head of operations and financial control for Black River, said: "We believe that our 19 year history of trading global markets through multiple market cycles and risk events, our global reach in both developed and emerging markets and our well established global administration and risk management functions will provide our investors with attractive alternative investment products."

Capco, the global financial services and technology solutions provider, has completed an advisory engagement to assist in the launch of Black River.
Capco assisted Cargill in designing and implementing the operational support for Black River, which will be based on the capabilities of Cargill's GCM division.. This included hedge fund operations, technology, and business control infrastructure, as well as assisting in the evaluation and selection of third party vendors for both technology and services.

Stuart Feffer, co-head of Capco's Private Client and Asset Management (PCAM) practice, said:  "Cargill has very strong business, operations and technology teams, and desired to launch Black River making use of best practices in operations, technology and risk management."

Black River is expected to launch a series of products aimed at institutional investors by mid-2004.

copyright hedgeweek 2003


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