Commodities crackdown forces CTA closure

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UK-based global macro manager Cantab Capital Partners is set to close its $320 million commodities trading strategy due to concerns over the impact of new investment restrictions.

The Cambridge-based company intends to formally shut the CCP Quantitative UCITS Fund on June 30 2013.

In a note to investors, Cantab Capital said the announcement coincided with a consultation paper from the European Securities and Market Authorities which will significantly impact the way CTA/managed futures funds can use commodity index replication methods.

At the time of the ESMA announcement, market commentators had warned the largest CTA funds in the industry could be negatively impacted and forced to change their investment approach.

In a statement, Cantab Capital Partners said: ‘Following new UCITS guidelines it will no longer be possible to implement strategies that trade commodities within a UCITS wrapper.’

The CCP Quantitative Ucits strategy was launched in June 2012 as a mirror of the existing Cayman Island-domiciled hedge fund, the CCP Quantitative Fund.

The hedge fund was closed to new investors in November 2012, however, Cantab said those invested in the Ucits-compliant version will be offered the chance to transfer into this fund.

Alternatively, they will be given the option to transfer into the newly-launched hedge fund, the CCP Core Macro Fund.

Commenting on the planned closure, Dr. Ewan Kirk, chief investment officer at Cantab Capital Partners, said: ‘We do not believe in restricting our products or trying to circumvent rules.’

‘As a result we are saddened to close our CCP Quantitative UCITS fund, but are committed to ensuring our investors do not lose out as a result.’