Moreton Capital Partners launches El Nino-dedicated hedge fund

Moreton Capital Partners (MCP), founded by two Australian commodities experts, has launched a hedge fund strategy targeting dislocations caused by El Nino and is seeking to raise US$500 million raise by the end of September.

The MCP Special Opportunities Fund is a diversified set of long and short positions across 15 commodities, including grains, oilseeds and vegetable oils.

The fund aims to capitalise on climate-driven dislocations across global commodity markets as an intensifying El Niño threatens to drive a renewed wave of inflation into 2027.

Target investors include insurers, pensions and endowments seeking both diversification and protection against climate-linked inflation shocks. It will open to subscriptions in mid-July via a Cayman structure.

Australians Les Finemore and Alistair Fullerton co-founded MCP in August 2025.

Finemore is the firm's chief investment officer while Fullerton is the chief operating officer.

Finemore was most recently a portfolio manager at Farrer Capital. He started his career as a physical trader at Gavilon before moving to Merricks Capital as an analyst and trader.

Fullerton worked across institutional banking and global markets, spanning FX, derivatives and equities, including positions at CBA and Macquarie Group. He is also an adviser to the Australian government's agricultural departments and industry bodies.

"The El Niño-driven supply crisis threatens a renewed wave of global food inflation into 2027, squeezing real incomes, lifting import bills, and straining the economies and balance sheets least able to absorb it," said Finemore.

"The fund will give institutions a vehicle to hedge precisely that risk - a way to transfer weather and El Niño-driven food and commodity exposure to capital equipped to carry it.

"We believe global commodity markets are seriously underestimating the risk of potential food inflation that could arrive in 2027. We are moving quickly because the thesis is already materialising in real time."

He points to India experiencing below-average rainfall thanks to the failed monsoon, which delivers roughly 70% of the country's annual rainfall.

"According to India's Meteorological Department, nationwide rainfall is running approximately 46% below the long-term average, as of June 22, with deficits exceeding 55% across central growing regions and near-term forecasts pointing to further deterioration - a pattern consistent with severe El Niño episodes. The same dry signal is spreading across Asia, while an intensifying heatwave grips Europe this week," he said.

The fund's target markets range from South African maize, Malaysian palm oil to Australian and Argentine wheat, Chinese and Singaporean rubber, among others traded across futures, options and swaps.

"Strategies include cross-commodity relative-value trades, long and short baskets, and term-structure positioning, all constructed to isolate weather-driven imbalances while managing directional and correlation risk," Finemore said, adding he expects widening dispersion across commodities, regions and forward curves, creating both winners and losers.

"For farmers, that is a double squeeze of higher costs and threatened output, and it sets up an unusually bullish backdrop for a broad set of commodities," he said.

"No two El Ninos are the same and it takes a nuanced portfolio approach. Different crops, regions and points on each forward curve will respond very differently, which is precisely the dispersion the fund is designed to capture."