Natural Resource Fund Up 27%, Manager Predicts $75 A Barrel

Jan 19 2006 | 7:41pm ET

Garrett Smith, general partner at Dallas-based hedge fund firm Spinnerhawk Capital Management, which just passed its six-month-mark with net returns of 27.5%, has seen the highs and lows of the oil industry and expects crude to settle around $75 a barrel by year-end. According to Smith, Spinnerhawk’s fund has been taking in money each month since its inception in July, and now has $40 million in assets under management.

The fund, which aims to close at $250 million, invests in two asset classes, energy futures and publicly-traded energy stocks. “We devote approximately one-third of our portfolio to futures and the other two-thirds comes from equity,” Smith said. “Typically, I describe our competitive edge as industry experience,” said Smith, who began working on oil rigs as a teenager and later spent 17 years with BP Capital, where he worked with oil tycoon Boon Pickens.

“My own estimate is that we will likely see oil trade toward $75, which is where world-wide governmental bodies came and acted to stop prices from going up during the hurricane,” said Smith, referring to Katrina, which temporarily caused oil production to ground to a halt in parts of the Gulf of Mexico. “There was a long time where oil was not attractive; it was not something that hedge funds were made from,” he said.

“But today, things have changed and the markets are considerably tighter than they have been for many decades, and it has become an area that has generated price appreciation for the underlying commodity and the stock, so there is a lot of interest in it now.”  


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

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.