Volatility in natural gas prices helped a US hedge fund make a profit of more than $ 400 million in October alone.
Miami-based Statar Capital, which manages about $ 2 billion in assets and is led by Ron Ozer, a former trader at Citadel and DE Shaw, made about 23.5 percent last month, said several people familiar with the achievement.
Profits mark a setback for Statar suffered loss of about $ 130 million in the first two-and-a-half weeks of September.
Natural gas prices soared this year as demand recovered and supply was strained, but the market has been sluggish in recent weeks. British gas prices, which rose more than 500 per cent for the year early last month, fell along with continental European prices during October, falling about a quarter on signs that Russia would increase exports again after limiting supplies to Western Europe for months.
US commodity futures stock market Nymex meanwhile rocked during October and at one point rose to almost $ 6.40 per million UK thermal units before briefly falling below $ 5, only to recover sharply again.
Statar has been able to take advantage of market volatility, by repeatedly using declines in short-term contracts as an opportunity to increase positions before taking profits during price declines, says one person familiar with its positioning.
The gains, which equate to more than $ 400 million in trading profit for October, make Statar one of the major hedge fund winners out of a volatile month for some markets, with bonds also a big revolution.
Statar has risen about 29 percent this year, says one person who saw the figures. The firm declined to comment.
Statar was one of last year’s top-performing hedge funds and won 59 percent, as a number of commodity funds, including Pierre Andurand’s Andurand Capital, benefited from a collapse in oil and other commodity prices during the early stages of the coronavirus pandemic, and then of a subsequent setback.
Commodity markets have been difficult for hedge funds over the past decade, as long periods of falling prices have made it harder to make money, and a number of firms, including Armajaro Asset Management and Astenbeck Capital Management, have closed funds. However, Statar has previously said that this exodus of capital has helped to “create the best opportunity for natural gas trading in many years”.
Ozer previously focused on trading natural gas futures and options at DE Shaw before becoming chief portfolio manager for U.S. natural gas at Citadel, where after his first year he was promoted to reporting directly to billionaire founder Ken Griffin.
Additional post by David Sheppard
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