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24 Oct 2008

Iraqi Funds: "Business as Usual"

Iraq and the Babylon Fund sailed fairly unscathed through the panicky financial markets in September, according to CEO Robert Torkelund.

“Our strategy to focus on sticky money instead of any cheap hot money flow, has paid off so far,” says Torkelund, “Iraqi investments are not for the faint-hearted, of course. A financial crisis more or less, now and then, is business-as-usual for many of our experienced pre-frontier institutional investors. In fact, Babylon Fund's AUM is still on the rise - early this month reaching ATH - and no redemptions have been requested so far."

There was less to celebrate in absolute terms though, as the monthly return came in at a negative 5.9% m/m. (another -3.5% for mid-month Oct). The fund's losses in September were primarily a result of the bear sentiment. For example, Iraqi bonds lost heavily, with its USD-yields spiralling back into double-digit territory, as did all oil prospecting companies.

Inside Iraq, markets stayed mainly flat in September: Top 15 companies by Mcap, making up a full 70% of total Mcap, lost a few percentages on average. The diversification process from other Mid-Eastern investors, which was anticipated during the Dubai boom times already, seems instead to have started now instead.

The Babylon fund is a high risk $23.6 million investment fund with a $100.000 minimum investment. Managed by Godvig Capital and Björn Englund the fund has a 2% management fee.