BlueGold Calls It Quits

Apr 9 2012 | 10:22am ET

BlueGold Capital Management is to liquidate and return money to investors, after losing more than one-third of its value last year.

The London-based oil specialist told clients on Thursday that it would return almost all of their money this month as part of an “orderly closure,” after calculating its net asset value. It will return the rest later this year.

BlueGold co-founders Pierre Andurand and Dennis Crema did not explain why they were closing their four-year-old hedge fund. But after an astonishing start—it returned 209% in 2008, 55% in 2009 and 13% in 2010, the last after having to deny liquidation rumors after losing 14% in February—the fund has hit hard times, losing 34% last year and about 2% through February of this year. Assets under management have fallen from US$2.2 billion to US$1 billion.

That decline is only in part due to poor performance. Investors have been spooked by the formerly commodities-heavy firm’s increasing investments in stocks, which rose to half of its portfolio last year.

Andurand and Crema worked together at Vitol before launching BlueGold. One of their co-founding partners, Jean-Louis Le Mee, is set to launch a commodity hedge fund in June, Abydos Capital Management.

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