Plenum Investments Ltd., the Zurich-based money manager, plans to expand its energy trading by starting a hedge fund focused on continental Europe.
Plenum is in talks with investors to provide initial funding, and a first round of discussions was encouraging, Chief Executive Officer Rainer Gruenig said March 11 by e-mail. No start date has been set, he said.
Opening the fund, which aims to have assets of 250 million euros ($347 million), would expand Plenum’s energy trading beyond the Nordic power market, where its 43 million-euro Power Surge fund has bought and sold electricity since 2007. The continental energy fund will trade German and French power futures, Dutch natural gas, emissions and coal, and 70 percent of the capital will be invested using a quantitative computer model, according to a marketing document dated this month.
“We see demand for energy commodities from the investors, and the Americans are clearly ahead of the curve,” Gruenig said. “Such a fund would be economically viable at 15 to 20 million euros.”
Plenum plans to hire Trond Svanes Jensen to manage the fund, the document showed. His models developed at European Commodity Management AS in Bergen, Norway, returned 5.3 percent in the five months through May 2010 and produced positive results for investors since 2006, according to the documents.
Commodity hedge funds returned on average 10.7 percent in 2010, according to the Newedge Commodity Trading Index. Investors in the Standard & Poor’s GSCI Commodity Index received 9 percent. 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.
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