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Iraq Gets Its First Hedge Fund

Date: Thursday, August 16, 2007
Author: Hedge Fund Daily

The country may be at war, it may have no constitution to speak of and government that barely works, but at least it now has its first hedge fund. Launched by Iraq Fund Management Aug. 1, to coincide with opening day on the Iraqi Stock Exchange, The Iraq Fund was born of the belief that the country is terribly undervalued and offers enormous growth opportunities. “The primary investment objective of the partnership is growth of capital,” fund manager Dave Packard told HedgeCo.net, noting that it will focus on buying and selling securities of small to large capitalized companies, including stocks, warrants, rights and options of U.S. and non-U.S. entities. The fund, domiciled stateside in Delaware, “seeks to engage initially and primarily in proprietary trading” on the Iraqi bourse and will focus on the bank sector and state-owned enterprises. The general partner, says Packard, will “seek to uncover investment candidates whose public market value is at a significant discount to the underlying value of the company and its assets.” If it seems a little premature to launch now while Iraq is in such turmoil, Packard says it has developed strategic relationships with Iraqi business partners as its wishes to become “firmly entrenched” in the country “before the mainstream investors realize the opportunity.” Investment in the fund is relatively modest: a minimum of $250,000 with management/performance fees of 1.5%/15%. Incidentally, already there is one Iraq-focused offering: The Babylon Fund, which was launched last fall by Godvig Capital Management.