Commodities hedge fund giant Andurand posts 82.5% return as energy prices soar

LONDON (Reuters) - Hedge fund manager Pierre Andurand’s Andurand Commodities Discretionary Enhanced Fund was up 82.5% this year as of Oct. 1 on soaring energy prices, a source with direct knowledge of the matter said.

The discretionary fund has unconstrained risk limits and jumped 20% alone in September on rising U.S. and European gas prices, European power and oil prices.

His flagship fund, the Andurand Commodities Fund, was up 33% as of Oct. 1, added the source, who asked not to be named.

Global gas prices, particularly in Europe, have soared over the last month owing to supply shortages, high Asian demand and low inventories.

Dutch front-month wholesale gas, the European benchmark, continued its meteoric rise, hitting an all-time high of 100 euros per megawatt hour on Tuesday. Meanwhile, U.S. natural gas futures have hit a 12-year high.

The price moves have been so unprecedented that trading firms have suddenly had their liquidity tied up by massive margin calls in the hundreds of millions of dollars on gas futures.

Last year, the discretionary fund rose by a record 154% while the flagship fund was up 68.6%, after the COVID-19 pandemic roiled energy markets in 2020.

Andurand went short oil early on in the pandemic and cashed in when global oil demand and prices cratered during the peak of lockdowns and then rebounded later this year.

Oil demand has still not fully recovered to pre-pandemic levels but Brent futures hit a 3-year high this week while U.S. WTI futures jumped to their highest since 2014.

Reporting by Julia Payne; Editing by Emelia Sithole-Matarise and Sonya Hepinstall