Moreton Capital, a London-based commodities hedge fund, has launched a new unit dedicated to prediction markets, according to a statement seen by Financial News. The unit, named Moreton Predict, will allow investors to place bets on the outcome of commodity prices, geopolitical events, and other financial indicators.
Expanding into New Territory
The move marks a significant expansion for Moreton Capital, which traditionally focuses on trading physical commodities and futures. Prediction markets, also known as event contracts, have gained popularity in recent years as a way to speculate on uncertain outcomes. The unit will operate under the oversight of the UK Financial Conduct Authority.
Moreton Predict will initially offer contracts on oil, natural gas, and agricultural commodities, with plans to expand into metals and weather derivatives. The firm believes that prediction markets provide a more efficient way to hedge risks and express views on market-moving events.
Industry Trend
Several hedge funds and financial institutions have entered the prediction market space, including Kalshi and Polymarket. However, Moreton Capital is among the first traditional commodity hedge funds to establish a dedicated unit. The fund's existing expertise in commodities is expected to give it an edge in pricing these contracts accurately.
The launch comes at a time of heightened volatility in commodity markets due to geopolitical tensions and supply chain disruptions. Moreton Capital's CEO, James Moreton, stated that prediction markets offer a unique opportunity to engage with uncertainty in a structured manner.
- Initial focus on energy and agricultural commodities
- Plans to expand into metals and weather derivatives
- Regulated by the FCA
Moreton Capital manages approximately $2.5 billion in assets and has been operating since 2005. The new unit is expected to start trading in the second quarter of 2024.
