The day 130/30 bought the farm
Oct 3rd, 2007 | Filed under: 130/30It was only a couple of days ago that 130/30 lost its innocence with the announcement by Credit Suisse of a 130/30 index fund. But today 130/30 bought the farm - or at least the agribusiness sector.
Global Cap, a hedge fund start-up located in Zurich (Europe’s breadbasket?) announced today that it will invest in publicly-traded agricultural names around the world. And as if that weren’t hot enough, they’ll doing it using a 130/30 strategy. (If the name Global Cap rings a bell to European and Asian CNBC viewers, its because these guys do a regular shtick in front of that oddly uninspiring Zurich SMI backdrop.)
Global Cap fund manager Alexis Dawance says:
“With China getting wealthier, we are seeing soft commodity prices increasing and more investment worldwide into agriculture in general. And with water shortage and worldwide urbanisation destroying arable land, we need to have better yields on existing fields; and so we will invest in companies that produce fertiliser, tractors, plantations and farms. It’s also a good hedge against inflation.
Of course, using a 130/30 strategy means Dawance is going to have to short some names too. So he can’t afford to get too bullish on the sector.
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