Michael Coleman and Doug King’s $1.13 billion Merchant Commodity Fund dropped 19.4 percent in the first four months of the year, lagging behind the industry average, because of losses in agriculture.
The fund fell 5.3 percent last month, after a 13.1 percent drop in March, according to a report to investors obtained by Bloomberg News. Agriculture lost 21 percent in the first four months, wiping out gains in energy and freight. Coleman, the Singapore-based managing director of the fund’s manager, Aisling Analytics Pte, declined to comment.
The S&P GSCI Agriculture Index lost 15 percent through the end of April as New York-traded raw sugar slumped 44 percent. The gauge also includes wheat, corn, soybeans, coffee, cocoa and cotton. Crude oil traded on the New York Mercantile Exchange rose 8.6 percent in the first four months. Commodity hedge funds fell 2.1 percent on average in the same period, according to Chicago-based Hedge Fund Research Inc.
The Merchant fund managed $1.13 billion of assets at the end of April, compared with $1.54 billion at the end of 2009, according to the investor report. The fund had $10 million in June 2004 and assets peaked at $2.54 billion in February 2008.
Coleman, 49, and King, 43, are former Cargill Inc. traders. The fund gained 5.2 percent last year and 24 percent in 2008. Merchant more than tripled investors’ money since 2004.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising prices and participate substantially in profits from money invested.