Freepoint Sees Growth Ahead, Starting With Agricultural Trading

Updated on
  • Commodities firm hires three, moving beyond energy and metals
  • CEO Messer also on hunt for storage, transportation assets

Freepoint Commodities LLC is "in expansion mode," its top executive said, planning a series of asset purchases in 2016 and branching into new commodities with the addition of an agriculture desk.

The five-year old energy and metals trading firm has hired three traders for a new Kansas office set to begin agricultural trading in mid-June, Chief Executive Officer David Messer said in an interview Thursday from his Stamford, Connecticut headquarters. More staff may be added to that operation in the future, Messer said.

Freepoint, which bought a stake in a Virgin Islands refinery complex in January, expects to announce more purchases before the end of the year, with a focus on storage, transportation and other midstream petroleum operations. The company had its most profitable year ever in 2015 and may grow from 280 employees to more than 320 by the end of this year, the CEO said.

As a rout in commodity prices hammers traditional producers and shippers, Messer said he sees “a lot of possibilities" for trading houses to pick up properties. “A lot of assets are going to trade hands in the coming year."

Trading Strength

His confidence is another sign that trading houses have quietly emerged as one of the few winners amid the historic plunge in prices for oil, natural gas and other materials. Firms including Trafigura Group Pte and Vitol Group BV recorded some of their biggest profits ever in 2015, helped by high volatility and a market pattern called contango that allowed them to buy huge quantities of cheap oil and sell contracts to deliver it later at a higher price.

“Last year was a good year and we’re off to a fine start" in 2016, Messer said, declining to give more details.

Messer co-founded Freepoint in March 2011, bringing along much of the talent he helped attract to RBS Sempra Commodities.

Freepoint now has 13 offices in the U.S., Canada, Europe and Asia, which trade in oil, coal natural gas, copper and other metals. The company also runs storage tanks, a petroleum blending business and other logistics operations. It’s looking to add more of those holdings, taking advantage of a market that favors sellers, Messer said.

“It’s got to interlock with our trading desk, the supply chain," he said of any asset purchases on the table.

Among the latest additions is Freepoint’s new agricultural trading office, in Leawood, Kansas. The company has hired three traders to start: Doug Beddome, formerly of Lansing Trade Group; Brian Aust, formerly of AgSpring; and Ryan Vota, who had worked for Noble Group.

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