Brevan Howard Among Commodities Funds That Rose in May Rout
Commodities hedge funds run by Brevan Howard Asset Management LLP and Jamison Capital Partners LLC rose in May during the biggest commodities rout in a year, according to a report to investors and people familiar with the returns.
The Brevan Howard Commodities Strategies Master Fund Ltd., which managed $368 million as of March 31, gained 0.5 percent last month, according to a report sent by the London-based firm to investors and obtained by Bloomberg News. Jamison’s Koppenberg Macro Commodity Fund Ltd., which manages more than $600 million, increased about 5.9 percent, said two people briefed on the New York-based firm’s returns, who asked not to be identified because the information is private.
Commodity hedge funds lost 0.7 percent on average in May, the biggest monthly decline since June 2010, according to the Newedge Commodity Trading Index, as the sovereign-debt crisis in Europe and accelerating inflation in China fanned speculation that global economic growth will slow. The Standard & Poor’s GSCI Spot index of 24 raw materials dropped 6.8 percent, the biggest decline in a year.
Clive Capital LLP, the London-based commodity hedge fund founded by Chris Levett, lost 10 percent last month and assets dropped to $4.8 billion from $5.1 billion as of May 1, according to two people briefed on the returns and assets. A spokeswoman from Clive Capital declined to comment.
BlueGold Capital Management LLP’s commodity hedge fund declined 23 percent in May and slumped 10 percent in the first five months, according to two people briefed on the returns.
Pierre Andurand, chief investment officer of London-based BlueGold Capital, declined to comment.
Jamison and Brevan Howard didn’t immediately respond to phone calls seeking comment.
Some smaller funds profited last month by shorting commodities, including metals, oil and meats, and hedging their long bets. Speculators cut their net-long position, or bets on higher prices, in U.S. commodity futures by 11 percent in the week ended May 17, by 15 percent in the week ended May 10 and by 2.4 percent in the week ended May 3, according to data compiled by Bloomberg.
Duet Commodities Fund Ltd., which started in July and has assets of less than $100 million, rose 3.7 percent last month, according to a letter to investors. The gain resulted in part from short bets on silver, said Tony Hall, the London-based firm’s chief investment officer.
“We didn’t believe the story in silver. It bordered on hysteria -- that was the only commodity I could honestly say approached bubble status,” Hall said in a telephone interview, adding that he likes Brent crude oil and copper in the “medium term.”
Rosetta Capital Management, which manages $180 million and trades commodities futures, returned 1.8 percent last month, according to two people briefed on the returns. The gain was helped by the fund’s hog and cattle shorts, said Jim Green, the Chicago-based firm’s founding principal.
“We were of the opinion that the markets were forced too high by some of the ETFs and some of the long-only people that really took the cattle and hogs out of line,” Green said. He likes spreads in the futures of meats and grains for the next 16 to 18 months, he said.
Portal Capital’s Green Energy Fund, a long-biased fund based in Tualatin, Oregon, that invests in physical commodities, returned 2.42 percent last month, according to a letter to investors and obtained by Bloomberg News.
The fund buys commodities such as indium, gallium and germanium, taking physical delivery of the metals and storing them in a warehouse in Stratford, Connecticut. Robert Mitchell, the fund’s portfolio manager, said the strategy doesn’t trade commodities that have futures contracts, which was a major reason it was able to avoid the sell-off.
“There was forced liquidation from traders who had cascading positions” in futures contracts, Mitchell said in a telephone interview. “The stress in the system spilled over into other commodities.”
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