The Passport Materials Fund fell 17 percent in the second quarter, the fund’s portfolio managers, James Cunningham and Sebastien Boifort, said in a letter to investors dated yesterday.
The fund has taken longer than expected to exit private investments, the three largest of which are Ferrous Resources Ltd., Satimola Ltd. and Canadian Sinosun Energy Inc., the managers said. The fund lost 45 percent over one year, an annualized 13 percent over three years and 9.8 percent over five years. The fund still is up at a 6.6 percent rate since inception in March 2006.
“The privates in the portfolio are taking longer than expected to achieve liquidity, making it impractical to expect liquidity from the privates to increase trading capital in the near term,” Cunningham and Boifort said in the letter.
Steve Bruce, a spokesman for San Francisco-based Passport, declined to comment on the letter.
The 14 private investments in Passport’s materials fund make up about 62 percent of the portfolio, the managers said. On or near July 15, Passport intends to give back about 75 percent of the public portion of the fund’s net asset value to investors, according to the letter. The wind-down of those positions will continue “over the ensuing months,” the managers said.