Andrew Hall’s Commodity Hedge Fund, Austenback Down 10% YTD

Austenback Capital Management, a commodity based hedge fund was founded in 2008, by Andrew Hall, who also is the also chief executive of Phibro Trading, a century-old commodities trading firm. Hall was driven by his past success in the oil and gas commodities markets, during his time at Citigroup Inc. (NYSE:C), which was capped by a hefty bonus, as the oil prices rallied to highs of $147 per barrel, at the time, notes Reuters.

The hedge fund, that invests largely in Oil related products, with approximately 4.7 billion worth of assets under management, was up 4% during the month of July.

The fund rebounded from from one of its worst declines since 2008, the inception period, after it tanked in May to an all time low, due to the decline in the general oil prices.

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However, following the oil price rally that begun in June, the hedge fund did last month register a significant gain, albeit for the month. Hall’s Austenback is yet to recover fully from the May fall, and its YTD return is approximately -10%.

According to Hall’s communication to his customers, all the major assets in his commodity based portfolio were largely affected by macro-economic factors, including an overall decline in production capacities for Russian Oil, Brazil Crude, Palladium, and the South African gold.

The Russian Oil is yet to register any significant growth, in terms of capacity, since September last year, after recording an average of 10.3 million barrels per day all through.

The Brazilian Crude has been on the decline since the beginning of this year, dropping by nearly 250,000 barrels per day, from 2.25 million bpd to almost 2 million bpd.

Nonetheless, Hall reckons that, there are still huge oil deposits in the various oil fields that constitute his portfolio, but points out the high cost implications coupled with volatile prices for the commodity as a major quandary.