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Estlander & Partners’ new fund focuses on commodities

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Estlander & Partners has launched a new systematic fund – the E&P Commodity Fund – which is focused exclusively on the commodities sector.  

The fund began trading on 24 November 2014 with assets approaching USD30 million with backing from a large Nordic institution. The fund vehicle is only available for professional investors in specific jurisdictions within the approved regulatory framework. The strategy will also be made available as managed accounts to institutional and high net-worth investors.

The 100% systematic investment strategy is based on two years’ detailed research by the E&P team based in two of Finland’s leading university cities.  The new strategy also benefits from the incorporation of the trend-based systematic approach to trading underlying E&P’s core investment strategies: Alpha Trend and Freedom.

E&P Commodity strategy’s systematic investment decisions are based on combining fundamental commodity information, such as inventory dynamics and seasonality, with trend-following analysis. The strategy takes both long and short positions in the underlying commodity markets.

Martin Estlander, Chairman of Estlander & Partners, says: “Since inception, Estlander & Partners investment products have always incorporated significant exposure to commodities, over 40% historically in the case of Alpha Trend.  Our new research in the commodity space along with our +20 year experience in trading commodities are the driving factors for the new strategy.

“The commodity sector has been depressed over the past few years due to the lengthy unfavourable phase in the business cycle for commodity prices, with many investors reducing allocations in the space. However, we believe that actively trading commodities both on the long and short side offers opportunities that are a valuable part in any diversified investor’s longer term allocation. In addition, the fact that investment banks and several funds have recently withdrawn from commodities has created exciting new opportunities. The launch of our new strategy is clearly contra-cyclical and has been designed to achieve solid returns that are uncorrelated to the equity and bond markets.”

Estlander & Partners was founded in 1991 to generate uncorrelated returns from systematic investment strategies to global financial markets. The firm manages in excess of USD475m, including notional assets.  

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