RAB Capital has launched two new UCITS III funds – the RAB Global Mining and Resources UCITS Fund and the RAB Gold and Precious Equities UCITS Fund. The funds will commence trading on 11 April 2011 with an initial size of USD100m across the two strategies: approximately USD70m (Global Mining and Resources) and USD30m (Gold and Precious Equities).
The RAB Global Mining and Resources fund will be launched with daily liquidity. It will follow the investment strategy of the Cayman-based RAB Global Mining and Resources Fund which has significantly outperformed mining indices since inception in November 2007. It will initially be available in British Pound, Euro, and US.Dollar share classes. The Fund, like the RAB Global Mining and Resources Fund, will be a long/short equity strategy focused on equity investments in larger capitalisation companies in the natural resource sector.
The RAB Gold and Precious Equities UCITS Fund will also be a long/short equity fund with daily liquidity focused on large to mid cap companies in the precious metals exploration and production sub-sector.
Both funds will use permanent hedging to protect capital and to reduce volatility. Hedging is usually a combination of main market indices and sector specific instruments.
RAB Capital has a team of 10 investment professionals dedicated to global natural resources with considerable experience in the sector. The portfolio management team have been significant investors in the mining sector since 2003 and have developed a deep expertise and a broad network of contacts in the industry.
As well as focusing on demand for specific commodities driven by the rapid urbanisation and industrialisation of China, India and other developing regions, the team are focused on the tightness in commodity markets resulting from supply constraints. The Global Mining and Resources Fund’s investment universe consists predominantly of base metals, precious metals, steel and ferrous metals, and energy mining.
The funds have been set up as Luxembourg UCITS III SICAVs in partnership with Luxembourg Financial Group (LFG) and will trade on LFG’s Liquid Alpha UCITS Platform (LAUP)
Charles Kirwan-Taylor (pictured), CEO of RAB Capital, says: “We believe the natural resource sector is a particularly exciting one especially in the current environment where inflationary pressures are starting to emerge and supply constraints are beginning to bite. As our strategies are equity based they fit well within the UCITS framework.”
Gareth James, head of hedge fund solutions at LFG, says: “We are really excited about bringing RAB to LAUP. They bring UCITS investors access to an exciting and relevant investment area which is not widely represented elsewhere.”