Cayman-based Manager Launches Rare Diamond Fund

May 16 2011 | 11:21am ET

Cayman-based Novel Asset Management is launching a novel investment vehicle: a rare diamond fund.

The Novel Diamond Fund I will be the first in a series of closed-end funds targeting rare diamonds. Scheduled to launch July 1, it will be open to institutional and sophisticated investors and carry a management fee “as low as 1%” with performance fees “charged only for outperformance of the diamond market, and only after all invested capital is returned to investors,” according to Alan Landau, a fund director.

“Diamonds offer a compelling investment opportunity because supplies are constrained and demand is rising,” says Landau. It takes 10 years to take a mine from discovery to production and there have been no major diamond discoveries since 2001, but demand for diamonds is growing in emerging markets. This, says Landau, increases the profit potential in the “elite diamond market” for stones worth over $1 million which the fund will target.

Novel Asset Management is backed by Novel Collection, one of the largest specialty colored diamond traders in the world. “Success in this investment strategy requires experience, and the fund is going to be managed by one of the leaders in the rare diamond market. The manager’s CIO, Eliad Cohen, and managing director, Eyal Mashiah, have decades of experience trading in rare diamonds,” said Landau, and the “Novel Collection has a track record of profitably trading in rare diamonds and we expect that the fund will be able to generate substantial returns even in a flat diamond pricing environment.”

Landau says they’ve received “very positive” feedback from investors so far.

As a closed-end fund, it is expected to return all capital to shareholders and cease operations on or before June 30, 2013.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.