Octagon To Launch Commodity Finance Fund

Jun 25 2007 | 8:32am ET

Trade finance shop Octagon Asset Management is readying to launch a new fund next month.

The new vehicle, the Octave Trade Fund, will look for structured trade and commodity finance opportunities in physical commodity goods.

“We’re going to be financing soybean, sugar or beef, and will use the actual goods as collateral,” said Mead Welles, founder. “In our flagship Octave 1 Fund we had additional sector exposure including intellectual property, so the idea for this fund was to focus on the commodity finance sector and emphasize the distribution of risk at tighter spreads in order to generate higher returns.” 

Octagon’s flagship fund was launched in 1999 and is currently closed to new investors.

The new offering will charge fees of 1.5% for management and 20% for performance. The minimum investment requirement is $1 million.

Welles, a former trader for Cargill’s financial markets group, founded Octagon in 1998. The firm also manages the Octave Entertainment Fund, which invests in securities of companies in the entertainment sector and the Octave Transportation Fund, which invests in securities of companies in the transportation sector.

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