Bets on marijuana companies helped an Australian manager soar 145 percent last year to become the world’s best-performing hedge fund.
Stock and credit investments in North American marijuana producers contributed to 22 percentage points of last year’s gain for the $200 million Tribeca Global Natural Resources Fund.
The wagers helped the hedge fund rise to the very top among more than 10,000 rivals tracked by data provider Preqin and stand out in a lackluster year for the industry. Eight U.S. states and the District of Columbia legalized recreational cannabis use among adults and more than half the country’s states have laws allowing medical use of the drug. While federal laws prohibit the sale of marijuana and officials from Donald Trump’s administration have sent mixed signals on whether they would increase enforcement, not a worry for some because cannabis laws are state-based.
The U.S. legalized cannabis industry’s revenue hit $6.7 billion last year and is highly likely to surpass $20 billion in five years, Cleary said. The industry will expand to $50 billion by 2026, Cowen & Co., the former bond brokerage aiming to become Wall Street’s leading provider of cannabis research, estimated in September.
Stock prices of Aurora Canabis Inc. and Canopy Growth Corp., both medical marijuana producers which the Tribeca fund has invested in, more than tripled last year and have advanced 12 percent and 30 percent this year, respectively.
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