Louis Dreyfus's $1.4 Billion Commodity Hedge Fund to Shut

Updated on
  • Edesia to wind down by the end of the year, company says
  • Trafigura Group and Cargill also closed commodity funds

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Photographer: Michael Nagle/Bloomberg

The hedge fund run by Louis Dreyfus Holding BV will close by the end of 2017, joining a wave of commodity-investment vehicles that have shut in recent years.

All funds and investments run by Edesia Asset Management BV will be wound down by Dec. 31 as the agricultural-commodities giant focuses on its main business, the company said in a statement Tuesday. The investment firm founded in 2008 manages more than $1.4 billion, it said. That’s down from $2.7 billion in August 2013, according to the parent company’s website.

Trafigura Group closed its flagship Galena Metals Fund in 2015 and Cargill Inc.’s once multi-billion-dollar Black River Asset Management investment unit has been broken up and spun off. Renowned oil trader Andy Hall announced the closure of his flagship hedge fund Astenbeck in a letter to investors Aug. 1.

“In challenging market conditions, our flagship products have generated cumulative net returns of 42 percent and 70 percent, respectively since inception,” Edesia Chief Executive Officer Ian McIntosh said in the statement. “We anticipate the net asset values at closure of the funds to be at or close to the highest point in their history.”

While hedge funds on average gained 5.4 percent this year through August, commodities money pools lost 0.5 percent, according to HFR. Edesia’s had closed its office in Singapore to focus on its European operations.

Dreyfus has been reorganizing its business to focus on its core agriculture markets as it battles tough conditions after years of bumper harvests, lower prices and diminished volatility. The 166-year-old trading house controlled by billionaire Margarita Louis-Dreyfus has turned to cutting costs and selling assets to bolster its finances.

In May, Dreyfus sold its Africa-based fertilizers and inputs operations to private equity firm Helios Investment Partners and last month it announced it was selling a juice facility in the U.S. to Prodalim. The company, run by Chief Executive Officer Gonzalo Ramirez Martiarena, is looking to sell metals, dairy, juice and fertilizer assets or forge joint ventures.

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