Invest
Indebted resource sector due for restructure
Natural resource companies in Australia are due for a significant restructure, which could create opportunities for investors, according to one hedge fund.
Indebted resource sector due for restructure
Natural resource companies in Australia are due for a significant restructure, which could create opportunities for investors, according to one hedge fund.
Tribeca Global Natural Resources Fund co-portfolio manager Ben Cleary says resource company management in recent years has left them flatfooted today.
“Looking ahead, we see a number of interesting market structure issues in the natural resources sector. Generally speaking, most major commodity producers remain heavily indebted, having overinvested at the top of the market, and they are not able to take advantage of what appears to be a bottoming of the sector,” Mr Cleary said.
“The sector has always been a boom bust sector, which of course leads to poor asset allocation over time. This has led to lower liquidity, high volatility and wider spreads in the sector.”
The mining sector in particular has seen heightened volatility and an ongoing bottoming in Australia.
According to the ABS, investment in the mining sector over the 12 months to June 2016 was half of what it was during the peak of the investment cycle in 2013, while June quarter pre-tax profits were 33 per cent lower than last year.
It is this ongoing volatility that investors can take advantage of as the sector restructures, Mr Cleary said.
“This is an ideal backdrop for a long/short manager to take advantage of capital raisings, mispriced assets and cheap volatility. It is volatility that creates opportunity, and when that volatility strikes, you want to be able to go long and short to capture it.”
RELATED ARTICLES
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
