As the long-awaited natural gas price liberalization slowly begins to take hold in Russia, numerous funds and investors are eagerly waiting to throw money into production – and not necessarily just at Gazprom (new independent producers are looking to breakthrough the red tape). An interesting article in the FT takes a look at the tough sell of the future Russian gas market, where we can see that there is practically no event which can make energy investors averse to risk:

This backdrop creates the perfect milieu for Pharos Financial Group’s Pharos Gas Investment Fund, which touts itself as the only equity vehicle focused on Russia and its neighbours. Fuelled by rising prices and subsequent mounting corporate profits, this long-biased fund gained 38 per cent in 12 months to May 31, 2008. Its impressive performance stands out, especially when indices tracking hedge funds are mostly flat to slightly higher for the year. Yet the Pharos gas fund is not the hottest ticket in town. Getting prospective investors on board had so far been a tough sell for Peter Halloran, the chief executive of Moscow-based Pharos, which has total assets of $150m.