Diamond Circle Capital PLC hopes to raise $400 million in its initial public offering (IPO), building a portfolio of diamonds with a minimum investment of $1 million per stone, and then to wait for prices to increase.
The fund will be headed up by independent commodity asset management firm Diapason Commodities Management, which provides a range of commodity investment solutions to its institutional and high net worth clients.
According to a Reuters report, the closed-end fund will invest in the high-quality segment of the physical polished diamond market, according to a prospectus for the initial public share offer, expected to take place on June 24.
"Catalysts for growth in investment demand are in place for large high-quality diamonds, underpinned by the rising number of high net-worth individuals, especially in the Middle East, Southeast Asia and the Russian Federation," the prospectus for the Diamond Circle fund said.
The prospectus also said that "A steadily declining mineral reserve base, compounded by limited exploration success, suggested tight supplies would continue, which industry analysts say could mean long-term growth for the fund."
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