Merchant Hedge Fund Founders Coleman, King Buy Singapore Rubber Trader
Michael Coleman, who co-manages the $1.3 billion Merchant Commodity Fund, and his partner Doug King have bought a stake in a Singapore-based rubber trader, which had sales of about $1 billion last year.
The two former Cargill Inc. traders control a company called Kincol Pte Ltd., which purchased 60 percent of RCMA Commodities Asia Pte Ltd., Coleman, 49, and King, 43, said in separate interviews yesterday. Chris Pardey, also a former Cargill trader, is a shareholder in Kincol and becomes chief executive officer of RCMA, they said.
The Merchant Commodity Fund, which invests in agriculture and energy, returned 12.7 percent in September and is heading for its seventh straight annual gain since starting in 2004, according to three people with direct knowledge of the matter. Rubber, used in tires, jumped 52 percent in the past year on the Tokyo Commodity Exchange as demand led by China, the top consumer, outpaced supply from Thailand, Indonesia and Malaysia.
“With China’s growth in vehicles and infrastructure requirements, rubber will be a critical commodity,” Zug, Switzerland-based King said. “We see it as strategic.”
The purchase was a personal one, and not related to the fund, Coleman and King said, declining to say how much they paid.
The acquisition gives the two fund managers access to supply, demand and logistics in the global rubber trade as RCMA operates in China and the U.S. The firm also has an office in the Netherlands and provides warehousing and transport services, according to its website.
Kincol has an agreement to buy the balance of RCMA “over the course of the next few years,” Coleman said. The stake was bought from Oei Hong Bie, whom Coleman has known for 26 years since he first came to Singapore, he said. Oei continues to hold “a significant stake” in the trading firm, its website said.
Pardey left Barclays Capital earlier this year where he was global head of agricultural products, coal and freight. RCMA has more than 70 staff, Coleman said.
“Our ambition is to build a strong commodity trading/ supply-chain management company, not limited to agriculture,” said Coleman, who was head of global rubber trading at Cargill. “Our roots are in physical commodity trading,” he said. King was Cargill’s head of global petroleum trading and ran U.K. grain trading.
The Merchant Commodity Fund managed $1.3 billion at the end of September, King said. The fund’s gain last month took this year’s return after deduction of fees to 7.5 percent, according to the three people with knowledge of the numbers.
Rubber futures in Tokyo dropped 0.7 percent to 321.9 yen a kilogram ($3,912 a metric ton) as of 12:20 p.m. local time.
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