GENEVA Jan 10 Galena, the fund arm of
commodities giant Trafigura, said on Thursday it had launched a
private equity fund for investing in small to mid-sized miners,
filling a void left by banks.
The fund, which has so far raised $275 million, aims to grow
to $600 million by year end when it will close to investors,
Galena said in a statement.
Banks are more wary about the junior mining market due to
the fallout from the European debt crisis and new rules designed
to shore up balance sheets.
"Small to medium-sized mining companies are finding it
harder to access funding in the current economic climate," fund
manager Jesus Fernandez, who has led Trafigura's investments in
mining since 2005, said in the Galena statement.
"The new fund provides a mechanism for bridging investor
appetite for commodity-linked assets and companies that require
capital at a reasonable cost."
Galena already has $2.5 billion under management and uses
its parent's vast global network in 56 countries to glean local
knowledge of commodity supply chains.
"The strength of Trafigura is that we can put together
different skill sets easily while other private equity funds
have to search outside," said Galena's head of marketing
Maximilian Tomei, adding that the fund would scour for mining
opportunities in the Americas, Europe and sub-Saharan Africa.
The fund will focus on coal, base, ferrous and precious
metals and Tomei said it was attracting interest from pension
funds and U.S. university endowments.
(Reporting by Emma Farge)