Friday, 27 March 2015
Last updated 1 hour ago
Sep 4 2013 | 12:25pm ET
In the wake of a court-order to liquidate its Commodity Master Fund, Ebullio Capital Management is quitting the physical metals business.
The British-based hedge fund said it would exit physical metals trading, citing sharply lower profit margins and the difficulty of competing with the industry's largest players.
"It's a market that's been sewn up by banks and trade houses, and others can't operate," Ebullio founder Lars Steffensen told Reuters. "That's OK, that's business, but we can choose not to be in that business."
Steffensen said that the loss of bank financing has cut margins on a typical copper trade by 90%, from 80% per year to 8%, with warehousing prices cutting that to just 1% to 2%.
"Today, because of low interest rates and ownership of warehouses by banks and trade houses, it's become impossible to obtain metal in the spot market outside of warehouses—or you have to pay very high premiums, so it's prohibitive," Steffensen said. Global regulators are looking into whether banks are artificially boosting metal prices by hoarding commodities in their warehouses.
Ebullio has shifted to commodity futures trading. The firm manages US$250 million and its Far East Commodity Fund returned 16.46% last month.
Also in August, a Cayman Islands judge ordered the liquidation of Ebullio's former flagship, Commodity Master, to pay damages to Noble Group stemming from an alleged breach of contract. That fund, which lost 96% in the first two months of 2010, was to be shuttered anyway, Steffensen said.
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…