Iraq Gets Its First Hedge Fund

Some of you probably read
that headline and thought it may be more useful if Iraq could build a
few hedges around their gardens first as, in this war-torn region, it’s
hard to imagine a hedge fund being of much use.  Nevertheless, with
infrastructure that is hardly working and an embryonic government, we
find that Iraq Fund Management launched on August 1 to coincide with the opening of the Iraqi Stock Exchange.

Based
in Delaware, USA, fund manager Dave Packard says "“The fledgling Iraqi
banking sector and Iraqi SOEs (State Owned Enterprises) offer a unique
opportunity, as they are greatly undervalued in light of their growth
prospects and the infusion of cash from the [U.S.] Department of
Defense, the Iraqi government and other sources … the primary
investment objective of the partnership is growth of capital.”

Now
I can’t help thinking there’s something opportunistic here, but in the
land of the free and the home of the brave reaping the rewards of six
years of government investments should be something we now consider,
shouldn’t it?

Mind you, with the recent performance of hedge
funds, we may well find that the explosions aren’t the insurgent
bombings or the investments, but the black box algo trading systems on
the Iraqi bourse.

For more on Iraq’s financial innovations, checkout these two stories on Saddam’s dollars and creating a payment network out of the rubble.