January 14, 2011 / 6:25 PM / 9 years ago

Exclusive: Energy fund Centaurus drops to 1st yearly loss

NEW YORK (Reuters) - Centaurus Energy, the natural gas hedge fund of billionaire John Arnold, posted a near 4 percent loss last year — its first annual deficit — amid a period of tough trading made harder by a crackdown on commodity speculation, an investor said on Friday.

“No one made any real money on natgas last year and for Centaurus it was harder, with the authorities breathing down their neck,” said the investor, who revealed the fund’s annual results to Reuters on condition of anonymity.

Centaurus declined to comment.

The Houston, Texas-based fund, which manages more than $5 billion, had outwitted nearly every rival in the natural gas market since its startup in 2002, gaining more than 300 percent in 2006 and nearly 30 percent as late as 2009.

But last year proved to be tougher than ever for Centaurus as the gas market moved contrary to bets taken by many funds.

Trading limits proposed by the Commodity Futures Trading Commission and other restrictions enforced by exchanges after the financial crisis had also crimped Arnold’s big-betting style.

The fund was fined $15,000 this month by the CME Group for violating position limits for natural gas on the New York Mercantile Exchange.

Reporting by Barani Krishnan; Editing by Dale Hudson

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