BlueGold Hedge Fund to Liquidate, Return Money to Clients

BlueGold Capital Management LLP, the $1 billion energy hedge fund co-founded by Pierre Andurand, is liquidating after losing 34 percent last year.

The London-based fund will return about 98 percent of investors’ money after calculating asset values this month, Andurand, 35, and co-founder Dennis Crema said today in a letter to clients, a copy of which was obtained by Bloomberg News. The firm didn’t give a reason for closing.

BlueGold, which managed about $2.2 billion at its peak, started trading in February 2008 and returned 209 percent that year, 55 percent in 2009 and 13 percent in 2010. The fund lost about 2 percent in the first two months of this year after dropping by more than a third in 2011, according to a person with knowledge of the returns, who asked not to be identified because the information is private.

“The bar for hedge funds staying in business is getting higher and higher,” said Ronan Cosgrave of Pacific Alternative Asset Management, an Irvine, California-based firm that invests $8.4 billion in hedge funds on behalf of clients.

The fund mostly invested in energy derivatives. U.S. benchmark oil prices gained 8.2 percent last year and 8.3 in the first two months of 2012, according to data compiled by Bloomberg.

Steve Bruce, a spokesman for BlueGold, declined to comment on the letter.

Abydos Capital

French-born Andurand and Crema, 51, worked at commodity- trading firm Vitol SA before starting BlueGold. Andurand began his career in 2000 as an oil trader at Goldman Sachs Group Inc.’s J. Aron & Co. unit in Singapore before working at Bank of America Corp.

U.S.-born Crema spent 12 years at Geneva-based Vitol, where he was a senior partner and head of trading. He previously worked at energy firms Tosco Corp. and Amerada Hess Corp. (HES)

Jean-Louis Le Mee, 38, who was a founding partner at BlueGold, is starting his own firm to invest in the shares of commodity companies. He plans to begin trading at London-based Abydos Capital Management LLP in June, according to the prospectus for his firm obtained by Bloomberg News.

To contact the reporters on this story: Saijel Kishan in New York at skishan@bloomberg.net; Jesse Westbrook in London at jwestbrook1@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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