NEAS Energy Funds Plc will close the 21-month old NEAS Power Fund on June 17 as investors preferred managed accounts and after it lost 7 percent this year.
“The rationale for this decision stems from the fact that the advisers believe that many institutional investors now prefer to invest in this asset class via managed accounts rather than fund structures,” the board of directors for NEAS Energy Funds including Chairman Niels Jensen said in a letter to investors dated yesterday and obtained by Bloomberg News.
The NEAS Power Fund, which buys and sells power, carbon, oil, natural gas and coal, opened in October 2009 and advanced 9 percent last year. Assets in the fund remained little changed at about $12 million since the start as investors instead chose managed accounts, Nick Rees, a partner at Absolute Return Partners LLP, which markets the fund, said yesterday by phone from London. Assets in the fund and accounts operated by its adviser NE Capital Management totaled $50 million as of this month, he said.
The 2011 loss “was a factor, but not the main factor,” for the closure, Rees said. The NEAS Power Fund rose 1.2 percent in April and 2.3 percent in May, recovering from a first-quarter decline of 10 percent.
“Profits were made from the favorable movements in the German power market, in the volatile crude oil market and by taking a long position in carbon emissions,” according to the fund’s May letter to investors obtained by Bloomberg News.
German power for next year, a European benchmark, traded at its highest level in two years on May 31, climbing to 60.90 euros ($88.18) a megawatt-hour after Europe’s biggest economy hastened its exit from nuclear energy. Germany is the largest nation to abandon atomic power after the March disaster at Japan’s Fukushima plant stoked concerns about nuclear safety.
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