Wednesday, 23 July 2014
Last updated 2 hours ago
Nov 17 2008 | 9:06am ET
Zürich, Switzerland-based Da Vinci Invest is adding a greener tint to its portfolio. The volatility arbitrage hedge fund is readying an environmental shariah-compliant offering to launch in January.
Dubbed the Green Falcon Fund, the new vehicle will invest in the carbon markets and forestry. The carbon markets are steadily growing in terms of traded volumes, liquidity, transparency and investment opportunities, according to the firm. Energy prices are characterized by recurring inefficiencies, enabling a range of arbitrage strategies.
“Since our intention is to run an Islamic Fund, we will comply with the respect of the Islamic law on trading, and work closely with local advisors to set up halal (permissible) and haram (forbidden) trading strategies,” said the firm. “This also means that it is our aim to avoid bayu al gharar (trading with excessive risk) and we will concentrate on the more vanilla structures and strategies.”
The firm estimates that the current size of the carbon market is in the neighborhood of US$30 billion and is projected to grow to US$ 1 trillion within 10 years.
On the forestry front, Da Vinci said forest investing is an attractive investment opportunity that may offer consistent value growth and diversity. The firm will work with it advisors, Rainforest Invest, Forest Finance and Miller Forest, to source opportunities in Panama, Costa Rica and Paraquay because those countries are politically stable and their “natural conditions are optimal.”
“Foreigners who invest in reforestation enjoy benefits like tax exemptions and the possibility to obtain a permanent residence permit. They are only using land for the plantations that formerly has been used for agricultural purposes. No rainforest is cut to put up plantations,” said the firm.
Green Falcon will be domiciled in Singapore and will charge a 2% management fee and a 20% incentive fee.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…