After deserting commodities markets during last year's slide, some hedge funds are starting to move back in, betting a recent pick-up in energy prices could signal a turning point.
A handful of managers are weighing up new specialist hedge funds, industry data shows, while some funds are stepping up exposure to energy markets and oil in particular.
Leading commodities indexes rallied on Friday after the International Energy Agency (IEA) signaled a possible floor in the price of oil which has slumped 65% since June 2014, hitting global growth and stocks.
"Family offices and institutional investors have started asking us about our positioning in commodities sectors, but mostly focusing on oil," said Samantha Gleave, co-manager on the Liontrust GF European Strategic Equity Fund.
The fund began building positions in energy stocks such as Tullow Oil, Weir Group and Soco International late last year, and has started to increase its commodity exposure through BHP Billiton more generally over the last couple months.
Investors resumed consistently allocating money to hedge funds and other strategies focused on commodities in September and have been steadily upping funds since, reaching $1.22 billion in January, the largest allocation since July 2014, eVestment data shows.
A survey of investors published in February by Barclays showed allocations to hedge funds investing in the commodities sector are set to rise 5% in 2016.
The flurry of interest has encouraged asset managers to raise bullish oil bets for the third week in a row, according to data from the U.S. Commodity Futures Trading Commission, which showed net long positions up 35% on the previous week.
Two new commodity funds have launched in the first 60 days of 2016, compared with just five launches and 17 fund closures in 2015, data from Preqin showed.
The first - $110 million Kimura Capital - will fund the transportation of commodities, while the second - Westbeck Capital Management, formerly Westbrook Asset Management, - hopes to generate returns through bets on small and mid-sized oil companies.
Jean-Louis Le Mee, partner at Westbeck Capital Management, is no stranger to the vagaries of commodities markets.
Five years ago when commodities were booming, Le Mee quit BlueGold Capital Management, one of the world's largest commodity hedge funds, to strike out on his own.
But by the time his new mining and energy equities-focused Abydos Capital was ready to launch in July 2012, BlueGold had shut with final-year losses of more than 30%, and mining stocks had slipped by 38%.
Abydos grew to $200 million but shut down after losing money on the back of a slump in the oil price from more than $110 a barrel in July 2014 to below $85 by that October.
This time Le Mee, who reckons oil hit a turning point at under $30 a barrel in January, believes he has timed the cycle correctly.
"We decided this was a once-in-a-career entry point," Le Mee said. "A lot of investors are starting to realize that the current oil price is not sustainable and we have to move higher," he added, despite "a bit of uncertainty" on how high prices would go and how quickly a recovery would happen.