WEST PALM BEACH, FL (HEDGECO.NET) – Russia\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s capital markets have been climbing with amazing speed in recent months, drawing attention from investors worldwide and securing Russia\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s place as the leading, and most lucrative,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009demerging market\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d on the planet.<\/p>\n
The new hedge fund, Greater Europe Deep Value Fund, will take advantage of the previously underestimated economic growth prospects. The fund will open in May and close at the end of June this year.<\/p>\n
The Greater Europe Deep Value Fund will have a lockup period of 3 years, which will allow it to make investment in illiquid, but highly profitable stocks. The Hedge Fund will be advised by Jochen Wermuth, who is also the managing partner of Germany-based Wermuth Asset Management.<\/p>\n
In an interview with Reuters, Wermuth is quoted as saying \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cThat will happen as the risk premium applied to them is reduced, as Russia\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s overall credit rating and global perceptions improve.\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d Russia is fast catching up with developed world countries due to its abundance of natural resources and strong workforce. Long-term growth prospects in Russia are better than for countries in the developed world, Wermuth expects price\/earnings ratios for second and third tier stocks to go to between 9 and 12 from around 3 to 4 now over the next 3 to 5 years.<\/p>\n
\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cGross domestic product growth in dollar terms\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u009daround $3,000 (1,680 pounds) per head\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u009dmay well triple over the coming five years due to real growth, high wage inflation and a stable exchange rate\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d, Wermuth said.<\/p>\n
\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cAverage monthly wages of currently only $327 could reach $1,000 a month \u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u00a6 earnings of companies focused on the domestic consumers should triple too. Russia and Kazakhstan benefit from raw material resources whose prices continue to rise due to strong demand from China, India and others,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d Wermuth said.<\/p>\n
Alex Akesson
Contributing Writer
HedgeCo.Net
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