[miningmx.com] –AS an investment analyst, David Pleming topped the mining rankings with a regularity rivals must have considered tedious (10 years, in fact). Now, however, the former Macquarie First South Securities analyst has teamed up with Tantalum Capital, a R1.7bn hedge fund which is to launch a global resources hedge fund.
Tantalum’s role will be to advise the fund, which will be US domiciled where it has been seeded, on suitable investments with South African investors accessing the fund through their offshore investment allotments.
The fund is mandated to scour the earth for investment opportunities in previous and base metals, bulk products, and energy, including gas and uranium.
“It’s a new challenge for me. Past successes don’t count for much,” said Pleming when asked about how he viewed the appointment.
Said Rob Oellerman of Tantalum Capital: “We can’t market this fund in South Africa through the normal channels so investors will be directed by word of mouth”.
However, there is the possibility, in time, of a rand-denominated sister fund although it’s perhaps early days to be expecting that before long.
Oellerman says Tantalum’s approach is a “bottom up” picking stocks that are trading at levels below instrinsic value; being a hedge fund, the reverse will also be true. “There’s no fund limit,” says Oellerman. “It’s premature to talk about it having a cap. It will be opportunity driven,” he adds.
Pleming brings his brand to the fund but Oellerman adds that he will find in some non-institutional clients the opportunity to prove his worth. The fund will be operated with Mike Lawrenson, Tantalum Capital’s existing resources and industrials specialist.
Pleming will continue with the research that helped him dominate the investment analyst rankings along with Lawrenson. “South Africa is a very small universe,” he says, hinting at the reach of the fund.
There’s no right or wrong time for a hedge fund to launch. What’s clear for the commodity markets is continued volatility which can only be good for a fund of this nature.
