Listed Mining Companies
LONDON – Hedge fund manager Scipion Capital is launching a fund this week to invest in junior mining companies exposed to Africa and provide finance to build mines.
Scipion expects the fund, which opened on November 1 with $15-million of seeded capital, to make annual returns of over 50%.
"Taking an equity stake in these companies, and providing the funding for their projects, allows us to give high returns to our investors as the share price goes up," fund manager Nicholas Clavel said on Wednesday.
"The junior mining companies that did secure financing have achieved returns in excess of 100% this year, so the potential is there for all to see."
Last year, Ernst & Young's Mining Eye index, comprising the top 20 mining firms listed on London's AIM market, fell 75%, but so far this year it has nearly tripled.
Scipion's fund will target companies listed in Sydney, Toronto and London with a market value up to about $200-million.
The fund, with a minimum investment of $500 000, wants to appeal to pension funds, endowments, wealth managers, sovereign wealth funds and other investors.
Scipion, with offices in Geneva and London, was founded in February 2007 to focus on Africa.
The Scipion African Opportunities SPC A fund, launched in August 2007, finances cross-border trade of goods to and from Africa.
It has gained 7% over the past 12 months versus 10,5% for Lipper Global Hedge/Emerging Markets.
