AUDLEY Capital, the natural resources investment firm co-founded by industry veteran Julian Treger, is joining forces with a former Anglo American executive to float a new mining venture later this year.
Activist investor Treger and John MacKenzie, who ran FTSE 100-listed Anglo American’s copper division until last year, are looking to buy mining companies worth up to $700m (£424m).
“It’s something we’re looking at but it’s still in the early ages,” Treger told City A.M. “We’re still identifying potential acquisition targets.”
Treger added that they are in talks with various investment banks, although no advisers have been appointed.
Investors are increasingly showing interest in the resources sector, hoping to snap up distressed mining assets for a good price at a low point in the commodities cycle.
Former Xstrata chief executive Mick Davis raised $1bn (£610m) for his new mining investment vehicle X2 Resources from private equity firm TPG and commodities trading house Noble late last year.
But in contrast to Davis’ venture, Treger believes it is better to go public straight away.
“Being listed give you advantages for the mining sector, as it gives you permanent capital without having to sell any assets,” he said.
“We think the public markets have superior factors to the private equity model.”
Lord Browne, former boss of oil major BP, has also tapped into the resources sector of late.
Browne is a partner in Riverstone Holdings, which floated an energy-focused investment vehicle Riverstone Energy last October, raising £760.3m.
Investors may be hoping to pick up cut-price mining assets, but large firms are still being discerning when divesting parts of the business. Rio Tinto took its diamond unit off the block last year due to a lack of suitable offers.
MacKenzie left Anglo American “to pursue other opportunities” after 24 years at the company, spending the last four as head of its copper unit. He graduated from the University of Witwatersrand in Johannesburg, South Africa in 1989.