Occidental May Dump Astenbeck, Phibro

Feb 18 2014 | 12:35pm ET

The marriage of famed oil trader Andrew Hall to oil giant Occidental Petroleum could prove short-lived.

Hall's hedge fund, Astenbeck Capital Management, told investors on Friday that it was discussing a change in its relationship with Occidental, which bought Hall's Phibro proprietary trading desk from Citigroup in October 2009 and which owns 20% of Astenbeck. The letter came after Los Angeles-based Occidental announced it would spin off its California unit, move to Houston and cut back on its proprietary trading.

"Consistent with Occidental's strategic review to focus on core businesses, it also plans to reduce its exposure to proprietary trading activities related to crude oil and other commodities," the company said.

Occidental bought Phibro after the federal government pushed Citi to sell the unit. Hall's $100 million bonus raised eyebrows in Washington after Citi accepted nearly $50 billion in government bailout funds.

But Hall's run at Occidental has been conspicuously less successful than his time at Citi. Astenbeck has annualized returns of about 4% since the beginning of 2008, nearly two years before Phibro was acquired by Occidental. But the $3.5 billion firm has lost money in two of the last three years: It was down 3.8% in 2011, Hall's first annual loss in 11 years, and suffered its worst-ever year in 2013, falling 8.3%.


In Depth

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

FATCA for Hedge Funds: Eight Common Pitfalls

Sep 1 2015 | 10:56am ET

FATCA is now a way of life for those in the financial industry and most professionals...

 

Editor's Note