Gresham Investment Management, the diversified commodities and futures pioneer, has raised USD30 million for a new strategy which taps into growing investor demand for actively-managed commodity exposure amid signs of a new bull market in the sector.
The Gresham Dynamic Commodities strategy will focus on a range of asset types spanning precious metals, energy, agriculture, livestock and food and fibres, and aims to be less constrained than traditional beta offerings in this sector.
Commodities have historically been considered a portfolio diversifier in times of drawdowns, mitigating the impact of inflation rate changes and providing a hedge against geopolitical event risk.
Gresham aims to capitalise on this traditionally-held perspective among investors with the new launch, which is benchmarked to the Bloomberg Commodity Total Return Index but does not target any tracking error, the firm said on Wednesday.
The new strategy will be run by Robert Howell, ex-head of commodities at Schroders, former lead manager on the Schroder LP and SAS Commodity Fund, and more recently senior manager at the Pennsylvania Public School Employees’ Retirement System.
Commenting on the launch, Gresham chief investment officer Jonathan Spencer believes the fundamentals are now set for the next bull market, throwing up new opportunities in commodities.
“Investors are sometimes reluctant from investing in commodities during bear markets, as short-term dips in commodity performance can negatively impact overall performance,” Spencer explained. “We’ve seen first-hand investors either being forced to reduce or terminate allocations to commodities for this reason, potentially missing out on the early stages of each bull market.”
He added: “We believe this strategy could enable investors to participate in the bull market and potential upside returns, without risking short-term overall portfolio performance. GDC complements existing beta and beta-plus allocations, providing investors with a strategy that could suit inflation, real assets or opportunistic allocations.”
Commodities futures pioneer Gresham, an affiliate of USD1 trillion global investment giant Nuveen, currently has almost USD6 billion in assets under management.
