Some of the biggest investment banks don’t just trade commodities on paper, they invest in the physical side of the commodities business, too. The characteristics of the markets – and their regulation – gives advantages to anyone who can move real assets around. A couple of months back news filtered out that GLG, a hedge fund, was going to form an oil production company, and it won’t be the first financial player to make this move.
The FT published a cut-out-and-keep guide to what the big investment banks are doing in physical energy commodities, presented here for your enjoyment (click for full size):
Related links:
Financials keen to keep ‘physical’ assets (FT, 23/09/09)
Sovereign wealth funds go physical (FT Energy Source, 07/09/09)
