--Robert Murray
Godvig Capital Management, the Luxembourg hedge fund firm focused on Iraq, is planning to soft-close its flagship Babylon Fund when it hits $40 million. The strategy holds $28.6 million and Bob Torkelund, who markets the fund, told AIN he is seeing interest from a number of possible investors, following a bumper month in May when the fund returned 14.2%. But Torkelund admitted that, despite the interest, it has until now proven difficult to get investors to commit to what is perceived as a risky strategy. “I hadn’t expected it would be that difficult to market,” he said.
So far, the majority of assets have come from Finnish pension funds, but Torkelund is now receiving calls from frontier-market specialists, some of whom are in the process of setting up their own funds of funds. He hopes to sign with some of these new entrants, particularly as many established frontier-market funds of funds have been hit by redemptions and have therefore deferred on their own planned allocations. Torkelund has also been discussing the fund with financial advisors and insurance companies, but nothing has yet come from these talks.
Babylon is up 36.9% year-to-date. It invests within a universe of around 110 Iraq-related stocks. The $40 million target reflects the liquidity constraints and limited number of investable countries in Iraq. Torkelund said the firm would turn down all subscriptions at this point, but would re-evaluate capacity as more companies open up and the Iraq Stock Exchange gains international recognition.
This article was originally published in Alternative Investment News.
