Last month did not go well at all for one commodities hedge fund, to say the least. Frere Hall Capital, founded by Taimur Hassan took in a loss of 22% in October, plunging the total return to -23.2% for the year.
Citadel and Yale alum
Taimur Hassan served as a Managing Director at Goldman Sachs before launching Frere Hall Capital in July 2012. The Yale alum has also worked at Citadel Investment Group as a trader between 2003-2007. The year-old hedge fund mainly trades energy related assets and netted a +9% gain in last year, according to Bloomberg News.
The much talked about “commodities’ super cycle” driven by accelerated growth in China brought outsized profits for the right bets in the past years. However as China struggled with its own problems and trends shifted, the game of commodities shifted in a big way. This shift in cycle has wreaked havoc at several noted commodity-focused funds. A few of them suffered so badly that they had to wrap up their business. Clive Capital, a commodities king of the past, announced that it was closing shop after several months of bad returns. Assets of the firm have dwindled from $5 billion to a mere $650 million in September. The fund has generated net loss for three consecutive years now.
Arbalet Capital, another commodity-focused fund, also chose to wind down barely two years into business. Assets at the fund fell from $700 million last year to $200 million this year. The fund was down 9% in 2012 and then fell another 6% in the first half of this year.
Gainers in the commodities strategy
However the sad story of losses does not apply to every case; Peter Brewer’s Cumulus Energy Fund has managed to gain 14.5% YTD after recording a 5% gain in October alone. The fund manages $350 million and was up 24.5% and 99% in 2012 and 2011.
Oceanic Hedge Fund, an equity-commodity fund, has netted a gain of 17.85% in this year. The fund manages $840 million.
Armajaro Commodities Fund, with investments in base metals, precious metals, energy, soft commodities, grains and livestock, returned nearly flat in October, closing ten months with a 3% gain. The fund was profitable in soybeans, heating oil and nickel but lost in crude oil. Armajaro manages over $1 billion in assets.
According to Bloomberg News, Taylor Woods Master Fund has gained 18% through October this year. The fund made the most profits on energy investments which make up for the bulk of the $860 million under management.
Another gainer in the commodities strategy were funds managed by Red Kite Group. The metals fund (AUM $280 million) is up 30% YTD, the Compass fund (AUM $500 million) is up 12% whereas the Red Kite Group Prospect Fund (AUM $115 million) is up 16%. The firm manages $2.3 billion in assets.
Andurand and Brevan Howard lose in October
Andurand Capital Management took in a loss of 5% in October, trimming total gain for this year to +27%. Andurand was founded by Pierre Andurand at the beginning of this year and has been trading since February 2013. Andurand has suffered major slips in the last two months that have reduced its overall gain, the fund was down 2.8% in September.
Krom River Commodity Fund with $300 million under management has incurred a net loss of -5.2% in the ten months of 2013.
Brevan Howard’s Commodities Strategies Fund was down 1.8% in October, bringing the YTD loss to -3.3%. The $880 million fund is managed by Stephane Nicolas.