London – A new resources hedge fund aims to pick undervalued explorers and small-scale miners rather than piggyback on rising metal prices, its managers said.
An unusual feature of the Blackfish-Investec Resources Special Situations fund is that it will offset the risk of lower metal prices hurting shares, by “shorting” commodities — betting that prices will in fact fall.
“What we are not looking to do is establish a fund that’s going to go up or down in sympathy with the underlying commodity price — there are enough of those already,” Martyn Konig, chief executive of London-based Blackfish Capital Management told Reuters in an interview.
If the fund buys shares in a copper miner, it can take a short position in copper.
