BlueGold Down 34% As Investors Fret About Stock Move

Dec 23 2011 | 10:10am ET

BlueGold Asset Management's obituary has been written before, only to prove premature. But the hedge fund is stumbling towards its first annual loss as investors worry about a change in the oil specialist's strategy.

London-based BlueGold is down 34% through mid-December, Reuters reports. Assets under management have fallen by some 40%, to US$1.2 billion from about US$2 billion.

BlueGold's losses this year have been steady; the firm was down about 25% through August.

But more worrying to some investors is not the firm's losses, but its portfolio. The firm's exposure to equities has risen to half of its assets, up from 5% at the beginning of the year. About 15% of BlueGold's exposure is to macro hedges, according to its latest risk portfolio.

"They are just not qualified to put on these kind of hedges," one investor told Reuters. "It's something that's worrying us. And from what we know, it's also worrying others who are invested with them."

Another source who works with that investor added, "We've no idea what specific trades they've been doing on equities or the macro side. We don't know the pluses and negatives of those trades, either. What we know is they've fallen deeper into the red and that's not comforting."

BlueGold founders Pierre Andurand and Dennis Crema made their name at Vitol trading oil.

"I always worry when any manager changes their stripes or tries to add a new strategy or even just a twist," another BlueGold investor told Reuters. "It doesn't mean they can't pull it off swimmingly, but more often than not, they don't."


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.