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VegaPlus Commodities Hedge Fund Quit Gas, Avoided Amaranth Fate
By Saijel Kishan
Nov. 21 (Bloomberg) -- Julian Barrowcliffe's Anglian Commodities Fund exited the natural gas market almost a year before Amaranth Advisors LLC, another hedge fund, was destroyed by plunging energy prices.
Barrowcliffe steered his $497 million fund, operated by VegaPlus Capital Partners Ltd., to metals. That helped produce a 22 percent gain in the 12 months through October, according to a letter sent to investors in the New York-based fund. The Goldman Sachs Commodity Index has lost 14 percent over the same period.
Like Amaranth, whose demise cost investors $6.5 billion after a bad bet on differences in natural gas prices, Anglian invests using a so-called relative value strategy. It attempts to profit from price discrepancies between commodities, markets, delivery dates and locations.
``We decided natural gas was rather hot to handle,'' Barrowcliffe, 44, said in an interview from the London offices of VegaPlus. ``It seemed to us that there was a huge amount of money chasing returns in the North American natural gas and power space and everyone was tripping over each other.''
Demand for commodities from China, where the economy has expanded 10 percent in each of the past five years, has helped fuel prices for oil and raw materials, giving investors such as Barrowcliffe opportunities to exploit price differences.
Metals have been the best commodity performers this year. Nickel and zinc have more than doubled while copper gained 55 percent because of production shortages and worker strikes.
``The price moves clearly helped to create the anomalies that we were targeting to exploit,'' Barrowcliffe said.
Booms and Busts
No matter how a fund chooses to balance its commodity holdings, using a relative value approach is never risk-free, said Matthew Evans, who advises companies on commodity-risk management at NERA Economic Consulting in New York.
``History 不要找我ls us that commodity markets, particularly energy, are cyclical and prone to booms and busts,'' Evans said. ``We have seen that price relationships can blow up |
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發表於 2006-11-21 19:45:09
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發表於 2006-11-22 15:12:47
