Barings launches mining fund for Burstow

Former BlackRock analyst Burstow to run new Global Mining offering for Barings, with mandate to invest in mining equities across cap scale.

Barings is to launch a Global Mining fund after poaching an analyst from Evy Hambro’s team at BlackRock. Clive Burstow returned to Barings last year as director and resources investment manager for his second stint at the group since his departure in 2007.

His role was to assist Jonathan Blake, head of global energy and materials, on the £465m Global Resources portfolio. Barings has now decided to launch a fund making use of Burstow’s mining expertise.

The Global Mining fund is due to launch in March, subject to regulatory approval, investing in mining equities across the market-cap spectrum. Large caps such as Xstrata and Rio Tinto can feature in the fund alongside smaller exploration and development companies.

Burstow, who has also worked at Cazenove and AllianceBernstein, said at current valuations there are opportunities for mining stocks to re-rate in the next 12 months as emerging market demand supports earnings.

“China’s insatiable appetite for commodities remains a key driver of the asset class, with the country now responsible for around 40% of the world’s global commodities demand, compared to just 10%-15% at the turn of the 21st century,” he said.

“With emerging economies across Latin America and Asia also in the midst of rapid urbanisation and industrialisation, we expect demand for industrial metals to remain high for years to come.”

Last year saw the launches of the Jupiter Global Energy fund for Derek Pound, while Artemis brought to market a Global Mining fund for John Dodd in April.
Other big players in the sector include Hambro’s BlackRock World Mining investment trust, while Investec has Enhanced Natural Resources, Global Energy and Global Gold funds. 

Mining has been touted as a major theme for this year after a poor second half to 2011, with Schroders’ Richard Buxton expecting a rally in shares and PSigma’s Bill Mott and SLI’s Ed Legget adding to their mining positions towards the end of last year.

Mike Deverill, investment manager at Equilibrium Asset Management said, although he expects a rally at some point in 2012, he is not sure now is the right time to invest in commodities. “We can see a rally happening at some point as we have had such a poor past year.

“We think the markets will bounce back but we are wary for the next six months as it is difficult to call where global economic growth will go.” Meanwhile, Mark Preskett, investment consultant at Morningstar Associates, said he is also wary of the sector because it is so reliant on global growth and China.

“Mining is not an area we are looking at closely for 2012, but we do recommend First State Global Resources and JPM Global Mining,” he said.