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Rating:An ETF Player Lands Private Equity Money Not Rated 5.0 Email Routing List Email & Route  Print Print
Monday, June 27, 2011

An ETF Player Lands Private Equity Money

Reported by Armie Margaret Lee

Teucrium Trading [see profile], the Brattleboro, Vermont-based firm running the Teucrium Corn Fund and other commodity exchange-traded products, has landed an investment from private equity firm Sun Mountain Capital. The press release issued Monday morning did not state the size of the investment and when the transaction closed.



Teucrium president Sal Gilbertie at the Schwab Impact conference last year.
Teucrium president Sal Gilbertie confirmed that this is the second outside investment Teucrium has accepted, after GFI Group. Both Sun Mountain and GFI hold minority, non-voting stakes in the firm.

"The company's still controlled by myself and my two partners," Gilbertie told The MFWire, praising Sun Mountain's investment as "a good vote of confidence."

Watch for Gilbertie to use the capital infusion to beef up Teucrium's product lineup, personnel, and marketing and distribution. The firm currently boasts 10 full-time employees internally, as well as substantial outsource support.

"Sun Mountain Capital can provide some strategic support in marketing and distribution," Gilbertie said. "We are adding staff as need based upon our new products."

Gilbertie also noted that Teucrium has a growing office in Santa Fe, New Mexico, Sun Mountain's hometown.

Gilbertie started Teucrium with Dale Riker two years ago. The company, named after an herb, was launched July 28, 2009.

In June of 2010, Teucrium rolled out the Corn Fund and in February of this year, unveiled the Teucrium Natural Gas Fund and Teucrium WTI Crude Oil Fund.

Company officials expect the Teucrium Soybean Fund, Sugar Fund and Wheat Fund to secure listing approval at the end of the summer. And another new product is also in the works, though Gilbertie declined to discuss it.
Company Press Release

TEUCRIUM TRADING LLC ANNOUNCES EQUITY INVESTMENT BY SUN MOUNTAIN CAPITAL

Santa Fe, New Mexico - June 27, 2011 - Teucrium Trading LLC (Teucrium), the issuer of a family of six single-commodity next-generation Exchange Traded Products (ETPs), today announced that Sun Mountain Capital, a private equity and venture capital firm, has made an investment in the firm.

In commenting on the investment, Sal Gilbertie, President of Teucrium Trading, LLC said, "We are very excited by this investment in Teucrium and see it not only as an endorsement of our business model, but also a reflection of surging interest in next-generation commodity ETPs."

"Sun Mountain is excited to be supporting an innovative and unique company like Teucrium Trading," said Matt Culler, Principal at Sun Mountain Capital. "As a provider of single-commodity exchange traded products, we believe that Teucrium's fund offerings will continue to gain market traction and deliver previously unavailable trading strategies to a marketplace eager for commodities exposure."

The Teucrium family of ETPs are listed and traded on the NYSE ARCA and include: The Teucrium Corn Fund (NYSE:CORN) launched in June 2010; The Teucrium Natural Gas Fund (NYSE: NAGS) and The Teucrium WTI Crude Oil Fund (NYSE: CRUD) both launched in February 2011. The Teucrium Soybean Fund (NYSE:SOYB); The Teucrium Sugar Fund (NYSE: CANE) and The Teucrium Wheat Fund (NYSE: WEAT) are expected to get listing approval at the end of the summer.

Unlike many first-generation ETPs, which were financially engineered, Teucrium's funds have been designed to mitigate contango, a condition that plagued first-generation ETPs. Teucrium’s funds seek to do this by holding contracts in multiple months based on the characteristics of each specific commodity. This results in the potential for better returns for investors.

"Equally important," Gilbertie said, "the ETP structure allows investors to invest in commodities in an easily understood, unleveraged, liquid, and transparent security traded on the New York Stock Exchange."

Gilbertie said, "These characteristics make it possible for pension funds, hedge funds, institutional and individual investors and Registered Investment Advisors -- who have neither the resources nor the expertise to trade futures -- to add exposure to commodities in their portfolios without having to open a futures account."

About Teucrium Trading, LLC
The Teucrium Funds provide investors unleveraged direct exposure to commodities without the need for a futures account. Teucrium is an issuer of single-commodity-focused next generation Exchange Traded Products ("ETP"). Teucrium designs investment vehicles that offer liquidity, transparency and capacity in single-commodity investing (Agricultural and Energy Funds) to a wide range of investors in the popular and highly liquid ETP format. With its substantial experience in commodity futures trading, the Teucrium team has the ability to deliver ETPs in an equity format for investing without the use of leverage. The Teucrium family of commodity funds are all traded on the NYSE Arca. For more information, please visit: www.teucrium.com.
 

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