(Corrects 10th paragraph, 7 percent loss only in 2011, not
By Barani Krishnan
April 16 London-based Armajaro Asset Management
lost nearly a quarter of assets at its largest commodities fund
in the first quarter, the latest sign that edgy investors have
continued to withdraw cash from the sector after weak returns,
Assets under management at Armajaro Commodities Fund (ACF),
the biggest of the group's six hedge funds and one of three
dedicated to commodities, fell to $686 million by end-March from
$904 million at end-December, documents obtained by Reuters on
the fund showed on Wednesday.
Run by John Tinley, a 30-year veteran of commodities
trading, ACF invests in grains, precious and base metals,
livestock, fibers, energy and softs.
It had a trading loss of nearly 3 percent for the quarter,
attributed to crude oil and a few other commodities, according
to the documents obtained by Reuters. The company declined to
comment on its first quarter results, which are not made public,
but the drop of nearly 25 percent in its assets suggests
investor redemptions had kicked in as well.
"The commodities hedge fund sector saw redemptions in many
funds in 2013," Armajaro Asset Management said in an email to
Reuters. "ACF has over a decade-long track record of very strong
performance and we are optimistic about asset raising for the
fund in the coming months."
Commodity funds had a rough time in 2013 as institutional
investors deserted the space to chase a rally in equities.
Funds such as Clive Capital in London and Arbalet Capital in
New York closed after months of poor returns.
Assets under management at Vermillion, the commodity arm of
private equity group Carlyle, sank more than half to
below $1 billion in the nine months to December.
This year, famed oil bull Andy Hall appeared to have
redemptions in January as assets at his Connecticut-based
Astenbeck Capital fell to $3.5 billion from $4 billion in
December. The fund posted a trading loss of 8 percent for 2013.
ACF, launched in 2004, had double-digit gains in four of its
first six years, returning a peak of 24 percent in 2009. Its
performance has weakened since, with a 7 percent loss in 2011
and gains of less than 2 percent the last two years.
Until the sale of its physical commodity trading arm to
Switzerland's Ecom in November, Armajaro was one of the world's
biggest dealers in physical cocoa and coffee.
(Reporting by Barani Krishnan; Editing by Tom Brown)