Hot on the heels of Virgin Money and Cowen Asset Management, the London-based investment management team at Cumulus, on the PCE Investors Limited platform, have launched the latest Climate Change fund.

The Cumulus Climate Fund is a long-short equity fund which seeks to profit from the financial impacts of climate change.

It will be managed by the same Cumulus equity team that is responsible for the Cumulus Weather Fund’s successful equity portfolio, with an additional hire – Ian Thomas, Cumulus’s new Head of Equity Research who is a former colleague of Fund Manager James Hulse. James and Ian have a combined 30 years of experience in the equity markets.

The Cumulus team will be supported by a world class Advisory Panel comprising leading global and regional experts in each of the three key areas – politics, technology and science.

The Fund has been run on a formal ‘paper trading’ basis for 16 months and has delivered annualized returns of over 15% to end-December over some extremely volatile periods.

The Fund will target 15-20% returns on 10% volatility, with an extremely low correlation to the S&P (-0.10 for the paper trading period).

James Hulse, Fund Manager, said: “Climate change is already affecting huge numbers of companies all around the world – from the effects of more extreme weather as well as from new legislation. The Fund’s universe – environmental, energy, agricultural, consumer and industrial stocks – is also being impacted by natural resource constraints. As legislation and consumer behaviour changes, corporations need to adapt to survive, creating a great source of trading opportunities.”

He continued, "Several fund management groups are seeking to take advantage of climate change investment opportunities - but none have our blend of investment track record, scientific credentials or practical experience advising over 150 leading international companies on weather risk management.

He added, “Shorting is an important element of the Fund as long-only funds will not be able to capture relative mis-pricing and will be hurt by a downturn in sentiment towards ‘green’ stocks.”

Peter Brewer, CIO of the Cumulus Funds, said: “Cumulus’s assets under management now exceed $250m and we’ve grown our investment team from 3 to 13 people in preparation for the next phase of our growth.

“The Cumulus team has great depth and breadth of experience in trading energy, carbon emissions, agricultural commodities and weather derivatives and we are very excited about applying this expertise to the new Cumulus Climate Fund.”

Cumulus Climate Change Fund advisory Panel

Dr Joseph Romm is Founder of the Center for Energy and Climate Solutions and author of ‘The Hype about Hydrogen’, ‘Cool Companies’ and ‘Hell and High Water’. He was formerly Acting Assistant Secretary of the US Department of Energy’s Office of Energy Efficiency and Renewable Energy.

Professor Daniel Kammen is co-Director of the Berkeley Institute for the Environment. He is also Director of the Renewable and Appropriate Energy Laboratory, Professor of the Energy and Resources Group and Professor of Nuclear Engineering at the University of California, Berkeley.

Professor Thomas Lovejoy is President of the H John Heinz III Center for Science, Economics and the Environment. He was formerly Chief Biodiversity Advisor to the World Bank, Senior Advisor to the President of the United Nations Foundation and Science Advisor to the Secretary of the Interior.

Christopher Flavin is President and CEO of the WorldWatch Institute and a Founding Member of the Board of Directors for the Business Council for Sustainable Energy. He is also an Advisory Board Member of the American Council on Renewable Energy and participated in the Earth Summit in Rio in 1992 and the Kyoto Conference in 1997.

Dr Leena Srivastava is the Executive Director of the Energy and Resources Institute in New Delhi and was a Coordinating Lead Author for the Third Assessment Report of the IPCC. She was formerly a member of the Expert Committee to formulate Integrated Energy Policy for the Government of India and a member of the National Security Advisory Board.

Li Junfeng is General Secretary of the Chinese Renewable Energy Industries Association and Deputy Director general of the Chinese Energy Research Institute. He was a Lead Author for the draft China Renewable Energy Law and the draft National Renewable Energy Development Strategy for 2006-20. He was formerly a consultant Energy Economist for the World Bank. Professor Jeff Hulse is the Royal Academy of engineering Visiting Professor in Principles of Design for a Sustainable Environment at Newcastle University. He was formerly Head of UK Group Environment, Health and Safety for BASF and was a Board Member of the Responsible Care Group of the Chemical Industries Association.

Professor Nigel Arnell is Director of the Walker Institute for Climate System Research and Professor of Climate System Science at the University of Reading. He was a Coordinating Lead Author for the Hydrology and Water Resources chapter in the IPCC’s Third Assessment Report and lead author in the last three Reports. He was also a contributor to the Stern Review of the Economics of Climate Change.