Sept. 14 (Bloomberg) — BlackRock Inc., the largest publicly traded asset manager in the U.S., plans to raise as much as $200 million for an agricultural commodities hedge fund, according to two people with knowledge of the situation.
The BlackRock Agricultural Fund will start trading early next month under Graham Birch, said the people, who didn’t want to be identified because the fund’s details are private. Birch, 47, who heads BlackRock’s natural-resources team in London, helps manage more than $30 billion.
The fund will invest 70 percent of its money in agricultural companies that make fertilizers, forest products or biofuels. Commodities such as corn and soybeans will account for 15 percent, with the remainder in farmland. The fund will be registered in Luxembourg.
“The case for investing in agriculture funds is still very strong,” said Jean-Sebastien Debusschere, chief investment officer of Geneva-based FourWinds Capital Management, which invests in commodity hedge funds. “Prices, inflation-adjusted, are historically very low and so there’s plenty of room for further gains.”
Expanding economies in Asia, coupled with extreme weather such as drought in Australia and flooding in Northern Europe, have helped drive prices for foodstuffs including milk and wheat to records. Corn, an ingredient to make ethanol, has gained almost 24 percent in the past year as demand rises for alternative auto fuels.
The Standard & Poor’s 500 Index of stocks advanced 13 percent in the same period, while U.S. Treasuries returned 6 percent, according to Merrill Lynch & Co. indexes.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested.
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