3A SA, the SYZ & CO Group's hedge fund management division, has formally launched the ACE Natural Resources Fund, a new sub-fund focused on raw materials and natural resources within Alternative Capital Enhancement (ACE), 3A's Luxembourg-based fund of hedge funds SICAV.
The new Fund is being launched at a point in time when natural resources are in a long-term growth cycle. Like all other ACE sub-funds, the ACE Natural Resources Fund has also been authorised for public distribution in Switzerland as an "investment fund with special risks".
Outlining the background to the launch, 3A stated: 'Analysts unanimously agree on the fact that raw materials and natural resources are currently in a long-term growth cycle owing to the combination of constantly increasing world demand and stagnating supply. This new fund provides an investment vehicle investing in raw materials and natural resources (such as energy, precious metals, agriculture, electricity, industrial metals, etc.) without having to depend on price rises in order to produce positive returns.'
'In contrast to traditional investment funds, the ACE Natural Resources Fund can also obtain positive results even during drops or stagnation in the specific markets in which it invests. The Fund has not only demonstrated its ability in maintaining decorrelation during chaotic markets, but also its capacity to benefit from the rise in raw material prices over the last 2 months.
Indeed, hedge funds resort to strategies enabling them to gain an upside or a downside exposure to raw materials or to equities in the sector in which they invest. By using arbitrage strategies, a fund can also obtain positive results independently of market direction.
"By assembling funds of this type within a fund of hedge funds such as the ACE Natural Resources Fund, it is possible to obtain overall exposure to natural resources whilst at the same time offering reduced volatility thanks to the diversification within the fund, and provide returns which are uncorrelated to the wider markets", explains Jean Keller, 3A SA's CEO.
The ACE Natural Resources Fund follows a multi-strategy approach and an active management style at the hedge fund manager level. The raw materials and natural resources universe offers a wide range of distinct strategies, be it in the Arbitrage, Macro or Long/Short Equity styles, due to the diversity of available assets and contracts in the sector. 3A stated: 'The high levels of volatility inherent in the natural-resources markets favour hedge funds and their quest for alpha.'
"An added advantage of investing in the raw materials markets via hedge funds is that one finds particularly experienced managers, who come with solid track records as fund managers, traders or heads of mining or extraction companies", commented 3A SA Analyst David Friche.
With this new fund, the number of sub-funds within ACE has now increased to fifteen. The ACE Natural Resources Fund is available in three reference currencies, USD, EUR and CHF. As with all ACE sub-funds, the Fund is registered in Switzerland.