LIM Advisors seizes opportunity to invest in distressed Asian-Pacific miners
LIM Advisors is looking to position itself to take advantage of opportunities created in the Asia-Pacific mining sector as commodity prices continue to crumble. The Hong Kong-based hedge fund has earmarked $120 million to invest in distressed mining and mining services companies over the next year.
The company views distress as an opportunity, particularly in the mining industry where equity investors have been scared off due to declining commodity prices. LIM Advisors' founder and CEO, George Long, believes it will only get worse before it gets better.
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He told the Australian Financial Review: "There will be a mining and mining services industry in some form at the end of the day, even at the bottom of the cycle...it's not possible in the modern economy to not have a mining industry. But we'll see a lot of consolidation. Junior minors will get wiped out, BHP and RIO will go on.”
According to AFR, the company will use the capital to fund rights issues, convertible stock deals and debt buyouts. In addition, the company will invest in Asia including in Japan and in Chian’s A Shares and H Shares market through its multi-strategy hedge fund.
Long believes China’s economy slowdown will push more companies in the mining and resources segment to the brink. "It's getting worse, we are still in the down turn phase."
Founded in 1995, LIM manages roughly $2 billion in institutional capital and is one of Asia’s largest and oldest hedge funds.
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