Hedge fund firm eyes carbon

Hedge fund firm Pure Capital plans to launch a range of funds, including products playing food and carbon markets.

Anthony Limbrick, chief investment officer of the New Zealand-based firm, told Reuters the Pure Carbon fund, which will be seeded with the firm's money, will trade in the European carbon market and have an initial capacity of $US20 ($NZ32) million.

He said the fund will aim to grow as the carbon market evolves, but is also ready to exploit the possibility of a slump in the segment.

"We think there's a 30 percent chance the market collapses ... That could create a `fat tail' (a very rare event with major consequences) for us to make money," he said in an interview at the GAIM 2009 hedge fund conference.

The Pure Food fund, which Limbrick says is still in its early stages of design, will trade movements in the prices of food products such as corn, wheat, soya beans and livestock and will donate a percentage of revenue to food charities.

The group is also launching the Pure Global Diversified Beta fund, a computer-driven quant fund that will aim to profit from movements in global markets such as metals, energy, equities and interest rates.

Pure Capital runs $US43 million in assets and is opening an office in London.

- Reuters