Israel Shipping Magnate Idan Ofer and Google's Eric Schmidt Among Billionaires Backing Hedge Fund

Boston-based CargoMetrics fund uses ship-monitoring technology to assess commodity flows.

Bloomberg

Israel’s Idan Ofer is part of a group of global billionaires investing in a quantitative hedge fund that tracks global shipping data to get information on international commodity flows and make better bets on commodities prices, The Financial Times reported on Sunday.

Ofer, heir to a shipping fortune who controls The Israel Corporation and Kenon Holdings, is part of a group that counts Google’s Eric Schmidt; former Lotus CEO Jim Manzi; Texan automotive billionaire Billy Joe “Red” McCombs; and Genel Energy founder Mehmet Sepil, according to the FT.

The Boston-based fund, CargoMetrics, uses VHF radio transmissions to track more than 120,000 vessels around the world, monitoring where they dock to gauge their type and size of cargo. Processed through algorithms, the data give the fund unusually detailed information about supply and demand it can use to trade commodities, currencies and even shares.

Ofer, who the FT described as Israel’s richest man, told the newspaper that CargoMetrics’ returns had been “more than acceptable” and said: “That gives me confidence that this machine can continue to learn and make serious progress and become a financially successful quant fund,” he said.

The billionaires’ backing of CargoMetrics has grown out of disappointment with the poor performance of traditional hedge funds and a burgeoning interest in new, technology driven strategies. CargoMetrics said it is planning to add other data sources such as satellite images to scan crops around the world and gauge their yield.