Cayman Islands-domiciled Montreux Natural Resources fund has come in as the second best-performing hedge fund in Preqin’s Global Hedge Fund report with a return of 142 per cent over the last 12 months, driven by the surging gold price and the performance of assets in which the fund invested.
The USD32 million fund, which generates returns through a range of commodity-related transactions, has during the last 16 months purchased mining interests in Tanzania, east Africa, and a refinery in Guinea, west Africa, at the bottom of the commodity super cycle as other participants were looking to exit.
The firm writes that once the mines are in full production they are expected to produce large quantities of gold on a weekly basis and at between USD450 and USD600 per ounce, so providing the fund with a share of the mines’ operating profits.
“The spectacular performance of the Montreux Natural Resources Fund over the last 12 months has coincided with the resurgence in the gold sector, and validates the investment management decisions we have made for the fund, making it one of the stand out performers in the commodity sector both last year and stretching into this year,” says Oliver Harris, managing partner of Montreux Capital Management Cayman.
“The gold mines in Africa could produce over USD40 million in cash per year.
“A listed miner recently bought a mine within five miles of the fund’s Tanzania mines for a significant sum because of the amount of metal discovered within the ground. Moreover, the Guinea refining capacity owned by the fund should enhance investor return yet further.”
