New York
The strategy employs a fundamental, discretionary relative value approach focused on the petroleum complex and natural gas. The foundation of the investment process is the fundamental analysis of supply and demand balances in global oil markets as well as regional oil markets. The investment process seeks to identify and capitalize on the potential mispricings due to seasonal trends, poor understanding of the dynamics of the forward curve and incomplete supply and demand analysis by market participants. All instruments traded are exchange listed and centrally cleared. Trade expressions are predominantly designed through futures based spreads, with a focus on the middle part of the futures curve (3-24 months). The strategy aims to be versatile in its application and expression and is designed to operate in different and changing market environment and conditions. The strategy has no directional bias and seeks to provide diversity by being comprised of different trades through the petroleum complex, which at times may be independently bullish or bearish in nature. The strategy typically employs 3-4 themes/trades at any one time, and generally no single trade contributes more than 50% of the portfolio’s VaR. Exposure is dictated by changing fundamental supply and demand dynamics. In Q2 2018, the strategy is expanding its investment team, mandate and philosophy and further building out its risk management process and risk management team. These changes recognize the evolving nature of the commodities trading business while adding to our investment and risk management process. We believe we are acknowledging some of the challenges facing recent commodity trading performance in a proactive and positive way. The strategy will leverage our capabilities across global commodities to offer investors a product that we believe can deliver consistent positive risk adjusted returns across a wider array of investments.
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