The commodities hedge fund industry has suffered its worst year in more than a decade as the sector’s top managers recorded heavy losses amid volatile markets, the FT reports. The average commodity hedge fund fell 1.7 per cent in 2011, according to a closely watched index compiled by Newedge, the first loss since the index was created in 2000 and down from a rise of 10.7 per cent in 2010. The drop came as multibillion-dollar commodities hedge funds such as Blenheim, Clive Capital, BlueGold and Merchant posted double-digit losses for the year. The Reuters-Jefferies CRB index, a basket of commodities, fell 8.3 per cent during the year, weighed down by falling prices for metals and agricultural raw materials.
BlueGold has emerged as one of the biggest casualties of this month’s downturn in oil markets, the WSJ reports. The $2.4bn London-based hedge fund is down 20 per cent so far this month, losing $500m. The fund is however exiting few positions and remains bullish on oil prices over the next few years. Taylor Woods Capital Management was relatively unscathed by last week’s carnage by contrast, having closed positions once prices failed to move up on bullish news. Despite losses piling up elsewhere — Sprott’s main fund down 12 per cent, Blenheim Capital’s flagship fund down 5.7 per cent — commodity hedge funds remain confident in their long plays, the FT says.
The growing political crisis in Libya and the Middle East is driving huge gains for some of the world’s largest commodity hedge funds, reports the FT. A handful of prominent specialists have made hundreds of millions of dollars in the past few weeks thanks to the significant market movements in oil, agricultural commodities and metals, including Clive Capital (up 5 per cent last month), BlueGold (up 7.5 per cent on its main fund) and Astenbeck Capital (4.2 per cent). The $5bn flagship Clive fund benefited from buying long-dated instruments in oil several months ago in anticipation of a price shock, according to an investor.
That’s crude on Friday afternoon, the same day BlueGold Capital Management fiercely denied rumours of company-related liquidations in the WTI market. Read more
There are some very intriguing flashes coming out on Reuters regarding the BlueGold hedge fund on Friday:
RTRS-HEDGE FUND BLUE GOLD DENIES IT WAS RESPONSIBLE FOR VOLATILITY IN CRUDE OIL PRICES IN LAST FEW DAYS Read more
It is always hard to be sure who has the best-performing hedge fund, but London’s BlueGold looks like it could be the winner for last year.
With a rise of 210 per cent, tripling investors’ money, the oil and commodities specialist set up in February soared ahead of rivals – most of whom lost money. Read more