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Bishop’s Impala Fund, Up 30% in 2020, Sees Commodity Bull Market

Yvonne Yue Li
·2 min read

(Bloomberg) -- Bob Bishop’s Impala Resource Fund, which gained more than 30% in 2020, is predicting a long-term bull market for commodities.

The fund, which is under Bishop’s $2 billion Impala Asset Management and focuses on commodity-related equities and materials, drew comparison to the last super cycle that started in the early 2000s on a China-driven demand boom. It sees copper as a “clear winner,” and is also bullish on wood products and the energy sector, forecasting oil demand to top supply in 2021, according to a presentation seen by Bloomberg News.

Copper, considered an economic barometer, is essential for “de-carbonization,” according to the presentation. Electric vehicles use up to four times more of the metal than internal combustion engines, while renewable energy uses at least three times more copper and as much as 15 times more than traditional power production, the fund said. The call echoes those by Goldman Sachs Group Inc. and BlackRock Inc.

The Impala Resource Fund has returned almost 86% since it started, according to the presentation to investors on Dec. 30. It was oversubscribed at its inception in 2016, and now has over $200 million under management, said a person familiar with the data, who declined to be identified because the information isn’t public. It was up more than 30% for 2020 and is now open to new money, the person said.

Copper has posted nine straight monthly gains, the longest run since 1994. Prices have surged about 80% from a low in March, helped by China’s appetite for commodities and supply snags early on in the Covid-19 pandemic. Impala sees further gains amid expectations for a production deficit, weaker dollar and the metal’s role in green technology.

The hedge fund industry as a whole saw outflows last year, but those focused on commodities had managed to raise money. They pulled in more than $4 billion in flows through October compared with about $55 billion in outflows from the industry overall, according to data from eVestment.

While a bullish cycle that started in 2016 was cut short by global monetary tightening, U.S. tariffs and Covid-19, raw materials now have “lots of room to run,” Impala said in the presentation. “This cycle looks more like 2003-08 than 2016-17.”

Raw-material prices climbed in the second half of 2020 as demand recovered following pandemic-related shutdowns. The Bloomberg Commodity Total Return index jumped 20% from the end of June to the end of December.

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