Financial focus: Volcano Fund

Oil and Gas Middle East speaks exclusively to Reech Aim's founder and CEO, Christophe Reech, on the recent launch and success of its new Volcano Fund.

Reech Aim, a company founded in 2006 to establish and manage alternative investment funds focused in financial markets, real estate and natural resources, recently unveiled its hydrocarbon centred Volcano Relative Value Fund.

The new fund is unique in that it looks to exploit inefficiencies in the oil market; something that suddenly becomes more attractive in light of the near US$100 swing in crude oil prices over the last three months.

Set up in July 2008, the Volcano Fund now boasts US$50 million in current capital and aims to grow the asset under management to $1 billion. The company operated a 2% growth during the three months which saw oil prices fall in the region of 60% - a positive indication of the fund's potential.

The main differentiator of the Reech Aim Group, according to the company, is the unique investment philosophy. Funds are managed on the basis of the pre-definition of the funds risk profiles and return profiles, with risk management actively used to assert the profiles values.

The Volcano Fund's investments are to be made in oil futures, options on futures, crude oil, refined oil products, oil tanker freight rates, OTC (over-the-counter) swaps and options. According to Reech, all of these will have exposure to oil risk, and therefore the dislocation between these markets presents the trading opportunity.

"We believe very strongly in the non-directional approach. The next few months and the coming years should allow us to see opportunities and inefficiencies in the oil market, not only for crude oil but also refined products. In fact, we are a great believer in the truth that crude supply is not the issue any more, but that the infrastructure for refined products has not caught up yet," says Christophe Reech, chairman, CEO and founder of Reech Aim.

"And, of course, the current global recession will also not help this situation," he adds.

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