U.S. Markets

Ex-Citadel natural gas investor opens new hedge fund

BOSTON (Reuters) - An investor who previously helped oversee U.S. natural gas trading at Citadel has set up his own hedge fund, a person familiar with the plans said on Monday.

Ron Ozer, who worked as a portfolio manager and co-head of U.S. natural gas trading at Citadel, has launched Statar Capital LLC to focus on natural gas trades. He worked at Citadel, which currently manages $30 billion, from July 2015 to April 2017.

Ozer’s New York-based fund has raised roughly $140 million in assets from family offices and institutional clients, the person who was not authorized to speak publicly about the private fund’s plans said. A spokesman for Statar declined to comment.

Statar is starting to trade at a time the United States is awash in natural gas and prices are not expected to rise any time soon.

Other energy trading funds have closed this year amid shrinking profits and market volatility, including Houston-based Velite Capital, which was once one of the most-profitable U.S. natural gas trading shops but began winding down operations two months ago.

Many commodities-focused hedge funds lost out on trades in energy betting on higher prices in February, a report from industry tracker Eurekahedge showed. More intense regulation on trading, fueled in part of Dodd-Frank legislation, has also prompted many funds to pull capital from physical commodity market trading.

Ozer began his career on Wall Street as a natural gas trader at hedge fund DE Shaw where he worked from 2008 to 2014.

Terrence Brennan joined Ozer as Statar’s chief operating officer from Trajectoire Capital Group where he was also chief operating officer.

Hedge fund industry returns have been muted over the last years prompting some big investors to turn their backs on these portfolios.

Data from Hedge Fund Research shows that fewer hedge funds were launched in the second quarter of 2018 than a year ago, marking the lowest number of quarterly launches since shortly after the financial crisis in the first quarter of 2009.

But data also suggest that fewer hedge funds are going out of business this year than in past years when the number of liquidations outpaced the number of launches.

Reporting by Svea Herbst-Bayliss; additional reporting by Ernest Scheyder in Houston; Editing by Tom Brown