The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Hedge funds get a taste for sugar

Small private banks wanting to offer their clients investments in soft commodities are increasingly using hedge funds as a point of entry. Interest in commodities has risen as high-net-worth investors seek diversification, but small private banks lack choice when offering third-party products.

Although oil and metals investments tend to be on the menu at most fund managers, such commodities as coffee, orange juice and sugar are often left to the small community of commodity traders being deemed to be too complex. As a result, private banks are looking increasingly to hedge funds.

Charles du Marais, director of wealth management firm Banque Bonhôte says: ?Hedge fund managers have a deeper knowledge of commodities as they tend to have worked as traders and are aware of the structures. Fund managers, on the other hand, are put off, as they do not understand issues such as shipping costs or quality variation. There are of course the larger houses like Merrill Lynch, Goldman Sachs and Morgan Stanley which offer specialist commodity funds, although hedge funds tend to use these as a prime broker anyway.?

Interest in commodities is expected to grow further among high-net-worth investors as they become better educated in financial products.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree