Commodity Hedge Funds Post ‘Strong Performance’ In 2021 As Energy Transition Opportunity Looms

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Commodity Hedge Funds Post ‘Strong Performance’ In 2021 As Energy Transition Opportunity Looms
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  • Bridge Alternatives Commodity Hedge Fund Index includes 15 largest commodity hedge fund managers by assets under management

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  • Index recorded a second consecutive year of positive double-digit performance for commodities-focused hedge funds
  • Total assets under management by the index constituents grew by more than $3bn over 2021

Commodity-Focused Hedge Funds Showed A Strong Performance In 2021

Wednesday 19 January 2022 – Bridge Alternatives, the specialist alternative investment advisor, has revealed that commodity-focused hedge funds saw a “strong performance” in 2021, with many seeing the energy transition towards renewables as a big opportunity and a $3bn uplift in investment across the index.

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The findings came as part of the Bridge Alternatives Commodity Hedge Fund Index, a monthly report which is designed as a benchmark to track the performance of the largest commodity-focused hedge funds globally.

The index is reported on a monthly basis and includes the largest 15 hedge fund managers by strategy assets under management in North America. The index is rebalanced and reconstituted on an annual basis and has two weightings – an Equally Weighted Index and an Asset Weighted Index.

The Equally Weighted Index was positive in each month of 2021, whilst the Asset Weighted index had two very slight down months in January and March.

Overall, the Equally Weighted Index saw growth of 19.39% over the year (2020: 25.35%) and the Asset Weighted Index saw growth of 21.16% (2020: 20.28%), showing the second consecutive year of positive double-digit performance.

Separately, the assets raised by index constituents for 2022 grew to $13.82bn, up from $10.26bn in 2021.

The Shift To Renewable Energy

Ryan Duncan, Managing Partner of Bridge Alternatives, said: “These leading commodity-focused hedge funds showed strong performance in 2021.  Looking forward, interesting fundamental macroeconomic themes continue to develop, namely the ongoing shift to renewable energy, which is expected to create volatility in crude and refined products, natural gas, electricity and metals markets.

“It’s undoubtedly an exciting time for the industry, with natural gas becoming an open-global market, creating opportunities for hedge funds which are able to trade instruments outside of Henry Hub (Natural Gas) Futures and options alongside US basis.

“Separately, supply chain dynamics, which have been aggravated and tested by the Covid-19 pandemic, continue to present challenges and volatility in the agriculture and softs markets. More opportunities could present themselves here throughout 2022 for the top hedge funds we track. This is reflected in the confidence investors have shown the hedge funds, with assets under management growing to $13.82bn for 2022. This is still a sector that remains ‘under the radar’ for many, but we are starting to see new launches enter the market and we plan to be an invaluable resource for these hedge funds.”


About Bridge Alternatives

Founded in 2014, Bridge Alternatives is a FINRA registered broker dealer and NFA registered independent introducing broker.  The firm is focused on providing capital raising, derivatives brokerage and strategic advisory services within the alternative investments industry.

About The Bridge Alternatives Commodity Hedge Fund Index

The Bridge Alternatives Commodity Hedge Fund Index is designed as a benchmark to track the performance of the largest commodity-focused hedge funds. It is the first commodity hedge fund index to be transparent and to give an accurate representation of where assets are allocated within the commodity hedge fund space. Index performance is reported on a monthly basis and includes the largest 15 hedge fund managers by strategy assets under management. The index is rebalanced and reconstituted on an annual basis. The most recent month’s performance may be estimated and subject to revision.

Constituents include:

  • Andurand Capital
  • CoreCommodity Management (Absolute Return)
  • Frere Hall Capital Management (Master Fund)
  • Gamma Q, LLC
  • Greenland Global Fund II (2X)
  • JEM Commodity Relative Value Program
  • Massar Macro Commodity Fund LP
  • Millburn Commodity Program
  • Orion Commodities Fund LP
  • Pan Capital Management (Energy Strategy)
  • PIMCO Commodity Alpha Master Fund Ltd.
  • Polar Star Fund Limited
  • Quantix Commodities (Alpha Strategy)
  • Sarkis LTD (Sarkis Energy Relative Value)
  • Statar Capital
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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