Oil Hedge Fund Vector's Assets Evaporate

May 14 2013 | 11:22am ET

Two straight down years have put a big dent in Vector Commodity Management's asset base.

The London-based oil hedge fund, founded by former Goldman Sachs trader Gilbert Saiz in 2009, managed just US$43 million at the end of April, Bloomberg News reports. The fund closed at US$600 million two years ago, and as recently as December managed US$318 million.

In the letter to investors, Vector did not explain the causes for the drop in assets, although significant redemptions undoubtedly account for most of it: The hedge fund lost just 4.9% over the first four months of the year.

Vector lost 14% in 2011 and 1% last year.

"Given the elevated levels of net speculative length in the market to begin the month of April, commodity prices experienced a sharp sell-off from the negative growth news," Saiz wrote. "Greater demand pull from refinery runs and reduced spare capacity should certainly create upside potential to crude structure this summer and should provide a base of support at a minimum for oil prices."

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