TORONTO (HedgeWorld.com)–Natural gas and oil is the focus of the latest Canadian hedge fund to employ a natural resources sector long/short strategy.
DeltaOne Capital Partners Corp. (Canada) launched the DeltaOne Energy Fund LP this month with C$3 million (US$1.9 million) in assets from Canadian high-net-worth investors and firm principals.
Focusing primarily on Canadian natural gas and oil company stocks in the long-biased fund, DeltaOne invests in companies with good production, exploration and management traits, said Scott R. Walters, co-founder and principal. The fund bias may change depending on trends in the sector, he added. Officials are seeking low correlations to the S&P/TSX Canadian Energy index.
Peter Linder is the firm’s energy specialist and has eight years experience as an oil and gas analyst. He previously was a natural gas consultant with a prominent gas-consulting firm, a vice president natural gas at the Canadian Energy Research Institute and spent nine years as a senior energy economist with Amoco Canada.
The vehicle is the only Canadian hedge fund offering focused on natural gas and oil, according to DeltaOne. A number of funds including those offered by Sprott Asset Management (Previous HedgeWorld Story) and Leeward Capital have been successful in investing in natural resources and commodity-linked companies.
This is the first energy hedge fund for DeltaOne, which opened its doors last December. The firm has two derivatives-based hedge funds for sophisticated individual and institutional investors. The energy fund is attracting primarily Canadian accredited and sophisticated investors. The minimum investment is C$150,000, except in Ontario, Alberta and British Columbia, where it has been set at C$25,000.
The management fee has been set at 2%, with a 20% incentive fee that is subject to a high watermark and a hurdle rate of 2% per quarter. The fund’s prime broker is BMO Nesbitt Burns; auditor, Sievert & Associates LLP; legal counsel is McMillan Binch and the administrator for the fund is General Ledger Systems Ltd.