Commodity hedge funds lost at least 20 percent of their assets last year after investors pulled out large sums following the sectorâ??s worst annual performance in more than a decade.The average commodity hedge fund lost 3.7 percent in 2012, according to an index compiled by Newedge, the biggest decline since the benchmark was created more than a decade ago and substantially worse than the 1.4 per cent loss of 2011.
The investorsâ?? stampede has come after several multi-billion dollar commodities hedge funds, including Blenheim and Clive Capital â?? the two largest â?? posted losses for the second year running, denting a hitherto stellar record of performance.
The year also saw the closure of several prominent hedge funds, including BlueGold in crude oil, Centaurus in natural gas and Fortress Commodities across all raw materials, further lowering the assets under management in the sector.
The withdrawals are the largest since the commodities hedge fund sector become fashionable in the early 2000s, according to investors and fund managers.
Blenheim, the worldâ??s largest commodities hedge fund, lost roughly 5 per cent last year, and saw its assets fall from $5bn to about $3.5bn, according to two investors. The fund, founded by Willem Kooyker, former president of the seminal hedge fund Commodities Corporation, posted a double-digit loss in 2011.
Clive Capital, the second-largest commodities fund run by former Moore Capital trader Chris Levett, lost more than 9 per cent last year and saw its assets under management drop to less than $2bn, down from more than $5bn at its peak.
Many commodities hedge funds stopped reporting to Morgan Hedge / HEDGEweb in 2012 after double-digit losses in 2011.
In a sign of the loss of interest among investors, several commodities funds of funds shut down last year. Aberdeen Asset Managementâ??s commodities fund of fund has closed, while Stenham Asset Managementâ??s fund is also winding down, the companies said.
However, not all commodity hedge funds performed badly. The $600m Black River Commodity Trading Fund, an agriculture and energy fund run by the asset management arm of Cargill, gained 8.8 per cent last year, a person familiar with its performance said. Investors in the fund include Calpers, the largest US public pension plan, and Cargill itself. Red Kite, a metals specialist, was up more than 10 per cent and Dicken Commodities, a midsize agriculture fund based in Memphis, Tennessee, gained more than 10 per cent.
