It may be wrong, going forward, to routinely refer to Red Kite Metals as the world’s largest hedge fund devoted to metals trading. That’s because it lost 20 per cent last month, according to Bloomberg, extending its year-to-date losses to 29 per cent.
Now, commodities generally are notoriously volatile. And those with money in Red Kite reportedly enjoyed a return of 188 per cent last year — mainly thanks to the soaraway price of copper.
But when Red Kite hits its inevitable bouts of trouble, other metals investors tend to fret. The fund dropped 29 per cent back in January, sparking talk of mass redemptions and liquidated positions. A hurried deal was put together with Red Kite’s backers who agreed to extend their redemption notice period from 14 to 45 days.
The news - revealed by Marketwatch.com - triggered a six per cent drop in the price of copper at the beginning of February.
According to Bloomberg, during August Red Kite’s parent, RK Capital, saw average losses of 14 per cent across the three funds it manages, having broken even in July.
For what it’s worth, three month LME copper was trading at around $7,390 on Thursday morning, off just $35.
