Arion Investment Management is a new London based firm focusing on commodities investment management. Founded in 2016 and headed up by Gerardo Tarricone, (pictured) the firm is launching its first fund, a Maltese SICAV, in October, focused on commodities, with portfolio manager Darius Tabatabai.
Tarricone is ex-Morgan Stanley and has brought on board James Purdie (also ex-Morgan Stanley) as head of investor relations. The pair hope to have commitments of USD10 million at launch for the new fund, which will trade derivatives across the whole range of commodities but with an initial focus based on base and precious metals, energy and foreign exchange.
Tarricone explains that the trading will be not directional, giving the fund more of a relative value strategy.
Purdie says: “We feel we are doing something counter intuitive in the commodities sector. If you take a step back and look at the macro side, markets are at an all-time high but it is the sixth year of a bear market in commodities.”
Tarricone and portfolio manager Tabatabai started looking at the commodity space in more depth and felt that post the financial crisis with its wave of regulatory change, larger investors have had to withdraw from the commodities markets, creating inefficiencies.
“The opportunity has arisen because of this,” Purdie says. “You can only do this as a small player so we will cap out at USD500 million in the first strategy as we lose our competitive advantage at the point.”
The fund is targeted at family offices, high net worth investors and smaller institutions. “We think we are different,” Purdie says. “No one is working in this space. Gerardo has been trading copper arbitrage for two years and gross returns are 30 per cent and this year over 20 per cent.
“We are beginning to see some volume coming back in commodities. We are not a one fund shop so we are hoping to bring in some more managers and run a few more funds and undertake bespoke mandates. We are trying to position ourselves as broad-based commodity specialists.”
