`Beau’ Taylor’s Commodity Hedge Fund Said to Top $500 Million
The Taylor Woods Master Fund Ltd., a commodity hedge fund provided with about $150 million in startup capital by Blackstone Group LP (BX) last year, has grown to more than $500 million, a person with direct knowledge of the matter said.
Taylor Woods is aiming to expand assets to at least $1 billion, said the person, who declined to be identified as the information isn’t public and didn’t give a timeframe for the planned increase. The fund, which began trading in February, returned 3.22 percent in its first four months, according to a report to investors obtained by Bloomberg News.
Hedge funds attracted $4.7 billion in May, taking in $100 billion during the first five months, the largest amount since at least 2005, according to Singapore-based Eurekahedge Pte. Last month, the Standard & Poor’s GSCI Index of 24 raw materials slumped 6.8 percent, the biggest monthly loss in a year, amid concerns that the global recovery may be faltering.
“We remain constructive on the commodity complex,” Chief Investment Officer George ‘Beau’ Taylor, 40, wrote in the report. Taylor, former head of global commodity proprietary trading at Credit Suisse AG, co-founded the fund with Trevor Woods, who used to head global energy proprietary trading at Credit Suisse. Woods is president of the firm, which is based in Greenwich, Connecticut.
“The pullback from May highs has provided an opportunity to enter the market at attractive levels,” Taylor wrote. The fund ended last month with bullish bets equal to 79 percent of assets compared with 75 percent at the end of April, he said.
Money managers investing in commodities lost an average of 3 percent last month and 0.1 percent from February to May, according to the Eurekahedge CTA/Managed Futures Hedge Fund Index on Bloomberg. The Taylor Woods fund returned 0.71 percent in May, the report said.
The fund used options to protect its so-called long positions in energy futures in May, when it had 65 percent of its holdings in fuels as of May 31, the report said. Long positions are bets that prices will increase.
The fund derived a gain of 0.6 percent from energy investments last month, according to the report. Brent crude dropped 7.3 percent in May, the worst decline in a year.
“Gains in oil, U.S. power and U.S. natural gas were somewhat offset by losses in coal,” Taylor said in the report, referring to May’s performance.
Blackstone Group, the world’s largest private-equity firm, provided about $150 million in initial capital to the fund, two people with knowledge of the plan said in September.
Taylor started his career as an energy trader at Merrill Lynch & Co. in 1994, and later ran Credit Suisse’s global commodities team with Adam Knight. Woods began at Enron Corp. in 1997. Both crossed paths first at Morgan Stanley, then JPMorgan Chase & Co., before joining Credit Suisse in 2007.
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