EUROPE - Prosperity Capital, a Russian dedicated investment house and one of the largest western asset managers solely focused on Russia, has launched its seventh fund - the Prosperity Oil Fund.
This open-ended fund will invest in the Russian oil and gas sector and will be managed by Mattias Westman and Alexander Branis.
The fund is being marketed as a component of global oil and gas portfolios for large Western institutions which perceive the importance of Russian oil and gas but need a local partner with a track record in Russian equities.
Prosperity said the fund will take advantage of recent growth taking place in the Russian oil and gas sector which produces some 10% of the world’s oil and has five of the world’s 15 largest oil producing companies.
It will invest a maximum of 25% in unlisted companies, and a maximum of 25% in former Soviet Union republics or other places not part of the Russian Federation.
Mattias Westman, the CIO of Prosperity Capital, and Alexander Branis will be running the fund. Both have expertise in running sector specific funds in Russia such as Prosperity’s Quest Power Fund, dedicated to Russian power utilities.
Westman said: “Analysis in Russia is both easier and harder than in western markets. We need not so much to find an exact figure for next quarter’s profits but to understand what companies will be the best competitors over the next few years.
“With BP’s recent $8bn investment in the TNK group in Russia, many oil and gas analysts understand that investing in Russian oil and gas has become imperative to grasp the development in industry in the West as well.”
The fund is domiciled in the Cayman Islands. Minimum investment is US$100,000. The management fee for A-shares is 2.5% and for B-shares 0.75% of NAV, monthly in arrears.
There is no performance fee for A-shares, but for B-shares it is 20% of the increase in the NAV above the Dow Jones Oil index, payable at end of the calendar year. There is a placing fee of 3%. ABN Amro acts as custodian. First closing was on 31 March 2003.
Mattias Westman founded Prosperity with Paul Leander-Engström and is today its managing director and CIO.
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