Iraq Hedge Fund In ‘Stable, Happy, Safe & Secure Place’

Jul 23 2008 | 8:07am ET

While you’ll be hard-pressed to find the words “calm,” “safe,” “happy” and “Iraq” together in a headline, portfolio manager Björn Englund is using them to describe his Iraq-focused hedge fund’s recent performance and the region’s stability.
Englund said relative calmness characterized his fund’s 0.6% drawdown last month (it is up 1.7% year-to-date) and, so far this summer, with only some slight exaggeration, Iraq could be portrayed as a stable and secure place compared to “virtually all deteriorating financial markets around the globe, and lately even security-wise; for example relative to the worsening Afghanistan-Pakistan theatre.”

Most of the fund’s sectors, asset classes and portfolio holdings were calm, according to Englund, except for the internationally-traded oil companies, whose volatility increased significantly and contributed to its drawdown.

Englund said he continued to add Iraqi equities to the portfolio, specifically one of the largest Iraqi “stand alone” commercial banks in anticipation of increased risk adjusted returns in the medium term.

The US$22.6 million Babylon Fund charges a management fee of 2% and a performance fee of 20%, and a minimum investment requirement of US$100,000.

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