Canadian alternative investment specialist Abria Alternative Investments, has launched a new diversified fund of energy hedge funds.
The Abria Energy Fund and its domestic counterpart, the Abria Energy Trust, are deisgned to maximize risk-adjusted investment returns from exposure to global energy markets and serve as an optimal means of investing in energy
To date, most investors have only been exposed to the energy sector through traditional long-only investments, and Abria believes that these energy stocks, royalty trusts, ETFs and mutual funds offer only a very narrow approach to profiting from the activity in this sector.
In a market that exhibits extreme volatility, a 'buy & hold' strategy is much less desirable than a diversified fund of energy hedge funds designed to maximize returns while mitigating risk, according to Henry Kneis, Abria's CEO and Chief Investment Officer.
'Energy investing should not be primarily a bet on whether the price of oil goes to USD 105 or back to USD 40,' explains Kneis. 'Our approach is to capitalize on the opportunities that price fluctuations present, as well as the vast opportunities that lie outside the exploration & development area of the energy value chain.'
Kneis, whose alternative investing track record dates to 1987, has had positive returns for the low volatility portfolios he has traded or managed in every year of their existence. Even when global capital markets were down - October 1987, early 1994, August to October 1998, September 2001 - his portfolios experienced positive returns.
Insatiable demand, past under-investment in infrastructure, political turmoil, and unstable weather patterns contribute to the persistent volatility of the energy markets. This volatility results in price inefficiencies that can be best exploited by skilled hedge fund managers, who can trade both long and short as well as profit from the changing price relationships between related securities or commodities.
Abria's view is that a well diversified fund of energy hedge funds will produce superior risk-adjusted returns and exhibit low correlation to other markets.
Background notes: Founded in 1999, Abria is a Toronto-based investment manager providing Canadian and international investors with multi-manager, alternative investment funds and structured products that aim to preserve wealth and deliver superior risk-adjusted, tax-efficient returns. Abria manages a number of funds including the Abria Diversified Arbitrage Fund, the Abria XL Fund (a leveraged version of its flagship fund) and the Abria Energy Fund. Abria's flagship fund, the Abria Diversified Arbitrage Fund, was the inaugural winner.
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