January 8, 2013 / 6:45 PM / 5 years ago

UPDATE 1-Former BlackRock energy fund manager joins hedge fund GRT

BOSTON, Jan 8 (Reuters) - Hedge fund manager GRT Capital Partners said it has hired former BlackRock fund manager Daniel Rice to lead its energy investment strategy.

At GRT, Rice will oversee about $400 million for institutional investors, the Boston-based firm said in a statement on Tuesday. Rice will manage both long-only and long/short accounts, GRT said.

Rice stepped down as co-manager of the BlackRock Energy & Resources Fund in June after the disclosure of a potential conflict of interest that involved his family business and holdings in the fund.

Energy stocks have lagged almost every other sector over the past year as weaker-than-expected demand and slackening global growth hurt prices.

Rice, however, sounded upbeat on the sector on Tuesday.

“The industry has weathered last year’s ‘Black Swan’ winter, and energy stocks are poised to begin reflecting improved fundamentals,” Rice said in a statement.

At BlackRock, Rice’s fund posted middling performance over his last three years, according to data from Lipper, a unit of Thomson Reuters. The fund gained an average of 6.88 percent a year for the three years ended June 30, 2012, placing 16th out of 31 energy funds, Lipper said.

But the fund did post an outstanding year in 2009, gaining 76 percent on successful bets that coal and natural resource stocks would recover strongly from the financial crisis of 2008.

GRT was founded in 2001 by two managers who left Fidelity Investments, Greg Fraser and Tim Krochuk, along with Rudy Kluiber of State Street Management and Research.

Rice managed energy funds at State Street Management before it was acquired by BlackRock in 2005. At State Street, Rice had worked with Kluiber, who ran the well-known Aurora Small Cap Value fund before leaving to start GRT, a spokeswoman for GRT said. ž

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