One ex-hedge fund manager’s new play on steel and battery metals

Back in 2014, Tesla was little more than 10 years old and investors were intrigued and yet spooked when production for its Model X was seemingly on hold although it had collected millions in advanced sales. That same year, former hedge fund manager turned private equity specialist Marcos Camhis expanded the focus of his Switzerland-based firm FOS Asset Management from real estate and hedge funds to include natural resources. Today it seems that due to the tremendous growth in electric vehicle production by all major automakers he could be set to profit from a long-term niche play in one of vital resources for lithium-ion batteries used in electric vehicles – nickel. “Over the past 5 years we have grown into a specialist boutique advisory business, with a focus on real-assets and especially natural resources,” says Camhis. “We are contrarian in our investment philosophy and focus on long-term turnaround opportunities.” Marcos Camhis (provided) With roughly $1 billion in advisory assets, FOS Asset Management expanded its investment horizon to two surprising locales – the Dominican Republic and North Macedonia. “Our philosophy is that we are contrarian, but we manage risk by investing in expert teams with turnaround experience in their fields of specialization, even if the assets may not look that attractive at the time of investment,” said Camhis. In the Dominican Republic, Camhis’ team worked with private equity backed Americano Nickel in the purchase of mining giant Glencore’s nickel asset, Falcondo, which was not producing at the time. The business was restarted in 2016 under Americano Nickel’s ownership and 2,000 employees were hired to help grow Falcondo company to become one of the largest exporters in the country. In North Macedonia, a ferronickel plant was also facing an uncertain future and was closed for a few months before FOS advised EuroNickel, private equity funded by the Global Special Opportunities Ltd fund, to restart the company with a $100 million influx of capital. The second acquisition completed in 2019 cemented the combined production of the two plants as the second largest ferro-nickel producers in the world. Ferro-nickel is used primarily in the production of stainless steel. Next up however could be another nickel investment from Camhis. Either through an acquisition, or via organic growth and investment, he may look for opportunities to profit from potential growth in electric car batteries for the likes of Tesla, which recently watched its stock soar to the consternation of short-sellers. Elon Musk over the years has publicly said he wanted to get rid of cobalt in car batteries, but reportedly Tesla is now in talks to buy cobalt from Glencore and corner the key ingredient’s market as it ramps up its production in Shanghai in a bid to tap into the world’s largest car market. The battery supply chain could prove to be a sizable opportunity for FOS and its clients but requires significant investment and resources. “We are busy with the existing assets now, and this will be our focus until a meaningful opportunity presents,” said Camhis. “We think the field we are currently active in has room to grow and you don’t want to spread yourself too thin.”

One ex-hedge fund manager’s new play on steel and battery metals

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