Clive Capital, one of the world’s largest commodity hedge funds, with assets under management of $5b at its peak, deploying “directional, long volatility approach” will be closing down at the end of September, returning about $1b of capital to its investors.
Chris Levett, the Founder of Clive Capital founded in 2008, was a former star trader at Moore Capital. He carved a name for itself as one of the savviest commodity investors in the world. It was dubbed an “overnight sensation” by one trade magazine and rapidly pulled in money from clients eager to profit from a then-booming commodity cycle.
In 2008, Clive generated a spectacular 44% return. The return in 2009 and 2010 was 17% and 20% respectively. In late 2009, it announced it would not accept new investors in order to stay nimble in the relatively small commodity markets. However, in 2011 and 2012, Clive lost 10% and 9% respectively. It is down 9% so far this year. In one single week in 2011, Clive lost more than $400m after steep, unanticipated falls in the price of oil.
Clive’s poor performance was due to the China’s economy slowdown, leading to the fall in commodities demand. Copper prices was down a quarter since the start of 2011 and oil prices have been treading water despite fleeting spikes. In markets such as natural gas, volatility has died down.
The Newedge Commodity Trading Index, an index of commodity hedge fund performance, is heading for its 3rd straight negative year, with a loss of 2.4% in 2013 to date.
BlueGold Capital, run by Pierre Andurand, closed down in April last year after losses.
Arbalet Capital, launched in April 2012, announced last week it would also be shutting down.
Financial Times, Sam Jones, Ajay Makan & Gregory Meyer, 2013-09-20, “Losses force closure of Clive Capital Hedge Fund”