Commodity fund suspension lifted

Commodity fund suspension lifted

A fund managed by Montreux Capital Management Cayman has now reopened after it was suspended for 14 months when one of its investments failed to meet payment deadlines.

Trading was paused in the Isle of Man-based Montreux commodity fund back in August 2015 when it failed to make monthly payments.

Assets worth $8.4m (£5.6m) were affected by the suspension, meaning shareholders were unable to cash-in their investments.

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But FTAdviser understands that the fund, which acts as a feeder vehicle into Montreux’s $32m (£25m) Cayman Islands-based commodity master fund, has started pricing again.

However, as a precautionary measure the fund is not accepting redemptions and new subscriptions until its review in three months.

Since lifting the suspension, the company has also decided to rename the master fund and the corresponding feeder fund to Montreux Natural Resources.

Oliver Harris, managing partner of Montreux Capital Management Cayman, said he was pleased the issue had been successfully resolved.

Back in 2015, the master fund was unable to determine the net asset value of the shares within the investment.

However, it was able to create a side-pocket for the feeder fund so the master vehicle could continue trading.

Mr Harris said the performance of the master fund, which invests in commodities, had been bolstered over the past 12 months following the surge in the gold sector.

The performance of commodity stocks also leaped in 2016, which has helped the fund return 142 per cent over the past year, according to Bloomberg.

Montreux's managing partner said: “With the recent resurgence in the gold sector we felt it was a right time to move strongly into physical gold mining." 

He pointed out that the manager had decided to invest in gold mining at the point most investors were leaving the sector, meaning the fund paid a “very low market multiple” which is now benefitting its investors.