Impala Asset Management Planning New Commodities Fund

Jul 15 2016 | 8:23pm ET

Hedge fund manager Impala Asset Management is planning a new fund that will speculate on rising commodity prices. 

The new fund is expected to launch around August 1, according to a client letter cited by Reuters on Thursday. Assets will reportedly be no more than $125 million at launch, according to the letter, and the fund will position itself to take advantage of a potential rally in commodity prices over the next 18-36 months by investing directly into commodities as well as mining, energy and industrial companies.

Should it launch, the new fund would be the latest example of hedge fund managers tentatively stepping back into the commodity asset class after punishing declines over the past year. There are indications the segment has bottomed; the HFR Macro: Commodity Index gained 1.83% in June and is up 3.75% for the first half of 2016. 

However, economic growth in China – which drove rising demand for all manner of commodities for many years – has weakened and remains sluggish, resulting in extraordinarily steep declines in various raw materials over the past two years. Oil has fallen more than 50%, while copper has dropped by a third and natural gas by 60%, according to Reuters data. 

Based in New Canaan, CT, Impala was founded in 2003 by former Tiger Management executive Robert Bishop and manages more than $2 billion in mostly long-short equity strategies. The firm’s main fund is up 8.1% so far this year through June, according to the letter seen by Reuters. 

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