Key Takeaways
- • Andurand Commodities Discretionary Enhanced fund, the riskiest vehicle run by oil trader Pierre Andurand, gained 20% in 2024 through March 22 after a record 55% loss in 2023, according to Bloomberg.
- • The fund operates with no set risk limits, and its 2023 loss came from leveraged bets on rising oil prices while Brent Crude fell roughly 10%.
- • Andurand Capital Management, which managed about $1 billion at the end of 2023, de-risked the fund after the 2023 losses.
- • Oil prices have risen about 14% year to date, driven by Middle East conflict escalation, Ukrainian strikes on Russian energy infrastructure, and growing global demand.
Summary
Pierre Andurand's highest-risk hedge fund, the Andurand Commodities Discretionary Enhanced fund, has recovered strongly in 2024 after suffering a record 55% loss in 2023, according to a report by Bloomberg. The fund is up 20% year to date through March 22, the report said, citing unnamed sources with knowledge of the matter. The fund is run without set risk limits.
The 2023 loss stemmed from leveraged positions betting on rising oil prices, which went the wrong way as Brent Crude fell by around 10% over the year. Bloomberg reported in January that Andurand Capital Management, which managed about $1 billion at the end of 2023, responded by de-risking the fund. The firm's flagship exposure to the commodity has since been reduced in line with that decision.
The 2024 rebound coincides with a roughly 14% rise in oil prices this year. Analysts and the Bloomberg report attribute the move to several factors, including supply disruption from escalating conflict in the Middle East, Ukraine's destruction of key energy infrastructure in Russia, and steadily growing global demand.
The performance underscores the volatility of discretionary commodity strategies that use high leverage, and the sharp swings between the fund's 2023 drawdown and its 2024 recovery illustrate the concentrated directional risk the vehicle carries.
The 2023 loss stemmed from leveraged positions betting on rising oil prices, which went the wrong way as Brent Crude fell by around 10% over the year. Bloomberg reported in January that Andurand Capital Management, which managed about $1 billion at the end of 2023, responded by de-risking the fund. The firm's flagship exposure to the commodity has since been reduced in line with that decision.
The 2024 rebound coincides with a roughly 14% rise in oil prices this year. Analysts and the Bloomberg report attribute the move to several factors, including supply disruption from escalating conflict in the Middle East, Ukraine's destruction of key energy infrastructure in Russia, and steadily growing global demand.
The performance underscores the volatility of discretionary commodity strategies that use high leverage, and the sharp swings between the fund's 2023 drawdown and its 2024 recovery illustrate the concentrated directional risk the vehicle carries.
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