Concerns may be growing over a possible bubble in commodity prices, but Stephen Cohen of Troika Dialog is confident that even if the oil price were to halve, Russia's economy would still grow at 6 per cent above inflation.

And as manager of the Russian firm's hedge fund operations he is fully prepared to put his and his investors' money where his mouth is.

"Russian oil companies are cheap relative to their international counterparts," he argues, "and are much cheaper now than they were in 2006 relative to where the oil price is.

At the moment Russian oil companies are discounting a medium-term oil price of about $75-$80 a barrel - and this a correction already priced in."

Troika Dialog Asset Management, part of the overall Troika Dialog Group, one of Russia's main investment banking groups, manages the $222m (£113m, €142m) Russia fund out of Moscow.

Day-to-day management of the fund is conducted by Oleg Larichev, chief investment officer of TDAM, and his colleague Vladimir Potapov.

The fund invests only in Russian and CIS (Commonwealth of Independent States) equities, and as a hedge fund it can go both long and short, although there are a number of constraints. "The fund may be between 0-150 per cent net long," says Mr Cohen. "It can also invest up to 20 per cent in less liquid stocks as defined by trading turnover and may include pre-IPOs up to 7 per cent." In addition, it can be up to 30 per cent invested outside Russia, with a maximum of 10 per cent in any one country.

The managers follow a three-pronged investment approach. First is a large-cap/mid-cap stock component "where we are doing active sector and stock selection and managing the delta-adjusted weight of each position and sector weighting using OTC options". This also allows the managers to compensate for any volatility in the fund, Mr Cohen adds, and can be between 20 per cent and 100 per cent.

The second component revolves around less liquid shares and usually accounts for between 15-20 per cent of the fund.

"This is where we have identified deep value. We basically buy and hold and wait until the thing pops up," he says. Eurokommerz was a recent example. "It's Russia's largest factoring company and is growing close to 100 per cent per annum," Mr Cohen says. "We are expecting an IPO in the fourth quarter or Q1 of next year."

The final element of the strategy is a long/short book, which typically ranges between 15 per cent and 30 per cent of the fund.

But overall it is the oil and gas stocks that, unsurprisingly, dominate the fund's investment profile. Mr Cohen is keen to stress that, although oil and gas stocks comprise 47.5 per cent of the fund, the overall number of holdings in Troika Russia does stretch to 55 - and is also diversified away from these two main sectors.

However, he also points out that the domestic oil and gas sectors are benefiting from internal structural changes independently of international influences. Even if the oil price plummets, he says, the fund is still positioned to benefit from movements in the two sectors.

Hugo Greenhalgh is editor of Investment Adviser