Former Millenium Capital Partners fund manager Tan Tien Leong is preparing to set up his own commodity hedge fund service in January 2010, a report by Bloomberg reveals.

The new firm, to be called AN Commodity Fund, will reportedly invest 25 per cent of its  $10 million start-up capital in precious metals,  30 per cent in energy and another 30 per cent in agricultural derivatives. It will be based in Singapore.

Commodity hedge funds have become popular in the past months as investors tap into alternative profit channels following the banking crisis. In a related report by HedgeFund.net, it was shown that assets in commodity funds had grown 6.8 per cent to $60.85 billion in the first 10 months of 2009, with performances expected to double by the end of 2010.

Asia-focused funds, in particular, exhibit the most protential, says another related report by Hedge Fund Research. In the first half alone, assets in Asian hedge funds rose to $73.7 million, including $800 million of new capital. The most notable performances came from the 'emerging Asia' category, which includes China and Singapore.