Nov. 20 (Bloomberg) -- Tan Tien Leong, the former fund manager at Millennium Capital Partners LP, plans to start a commodity hedge fund in January.

The AN Commodity Fund, based in Singapore, will invest in energy, metals and agricultural derivatives traded on exchanges, Tan said in an e-mail. The fund will start with $10 million, investing on average next year 25 percent in precious metals, 30 percent in energy and the same proportion in agriculture.

Assets in commodity hedge funds increased 6.8 percent to $60.85 billion in the first 10 months of the year, according to New York-based HedgeFund.Net. Copper and lead more than doubled and oil advanced 73 percent. Gold, which reached a record Nov. 18, may more than double by the end of next year, Tan said.

Tan, 31, managed commodity assets for Millennium in London for two years after spending five years at Goldman Sachs Group Inc. Tan Chay Chang, a director of the new fund, was a senior manager at Singapore-based Asia Genesis Asset Management. Joanna Han, its risk management manager, is also from the same company. AN is Mandarin for peace.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profit from speculation on whether the price of assets will rise or fall.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

Last Updated: November 20, 2009 05:57 EST