Key Takeaways
- • Zulfiqar Ali, former Balyasny trader, is positioning ZAMS Asset Management ($350M AUM) to capitalize on El Niño-driven energy market dislocations, with the fund up 13% year-to-date and gaining 5.7% in August alone.
- • ZAMS combines energy futures analysis with proprietary weather forecasting data from providers like MetDesk to identify pricing discrepancies between expected weather conditions and market expectations, maintaining 25-30 positions with average holding periods of eight days.
- • Power futures represent approximately 80% of the fund's profits, with the strategy successfully anticipating disruptions to European power markets from French nuclear plant outages during summer high-temperature events.
- • The fund employs six traders, quantitative specialists, and weather strategists to exploit market opportunities through the expected El Niño strengthening cycle extending into early 2027, though earlier losses on short French and German electricity positions demonstrate execution risks.
Summary
Zulfiqar Ali, a 34-year-old Cambridge mathematics graduate and former Balyasny Asset Management trader, has launched ZAMS Asset Management in London with a focused thesis on exploiting energy market dislocations created by strengthening El Niño weather patterns. The boutique fund, managing approximately $350 million in assets under management, has positioned itself to capitalize on the climate phenomenon's expected market impact through late 2026 and into early 2027.
ZAMS employs a quantitative strategy that combines energy futures analysis with advanced weather modeling to identify pricing inefficiencies. The fund purchases specialized weather forecasts from providers including MetDesk and supplements these with proprietary analysis to detect gaps between market pricing and actual expected weather conditions. This approach allows the fund to maintain a disciplined portfolio of 25 to 30 positions with typical holding periods of approximately eight days, enabling rapid redeployment of capital as market conditions shift.
The fund's performance has been notable, returning 13% year-to-date and gaining 5.7% in August, according to Ali. Power futures contracts account for roughly 80% of the firm's profits, underscoring the concentrated nature of the energy-focused strategy. The fund successfully anticipated some impacts on European power markets during summer disruptions affecting French nuclear plants, where high temperatures and low river levels constrained power generation and elevated electricity prices.
The strategy carries documented risks. Earlier in 2026, ZAMS held short positions in French and German electricity contracts based on expectations surrounding the transition from La Niña to El Niño conditions, but these positions incurred losses as market movements diverged from anticipated patterns. Nonetheless, Ali maintains conviction in the El Niño thesis as a significant market driver, positioning the fund's small team of traders, quantitative specialists, and weather strategists to exploit continued dislocations in energy commodities markets as the climate phenomenon develops.
ZAMS employs a quantitative strategy that combines energy futures analysis with advanced weather modeling to identify pricing inefficiencies. The fund purchases specialized weather forecasts from providers including MetDesk and supplements these with proprietary analysis to detect gaps between market pricing and actual expected weather conditions. This approach allows the fund to maintain a disciplined portfolio of 25 to 30 positions with typical holding periods of approximately eight days, enabling rapid redeployment of capital as market conditions shift.
The fund's performance has been notable, returning 13% year-to-date and gaining 5.7% in August, according to Ali. Power futures contracts account for roughly 80% of the firm's profits, underscoring the concentrated nature of the energy-focused strategy. The fund successfully anticipated some impacts on European power markets during summer disruptions affecting French nuclear plants, where high temperatures and low river levels constrained power generation and elevated electricity prices.
The strategy carries documented risks. Earlier in 2026, ZAMS held short positions in French and German electricity contracts based on expectations surrounding the transition from La Niña to El Niño conditions, but these positions incurred losses as market movements diverged from anticipated patterns. Nonetheless, Ali maintains conviction in the El Niño thesis as a significant market driver, positioning the fund's small team of traders, quantitative specialists, and weather strategists to exploit continued dislocations in energy commodities markets as the climate phenomenon develops.
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