Bluegold Joins List Of Crude Crash Casualties, Down 20% In May

Tyler Durden's picture

When we presented the first casualties emerging from last week's crude crash we predicted that in addition to Clive and Astenbeck, many more would soon crawl out of the woodwork. Sure enough, the WSJ discloses that London-based, $2.4 billion BlueGold commodities hedge fund is so far the winner in the loser category, dropping a whopping 20% so far in May, and once again confirming that in a market that only goes up, hedging is for wimps. This is the firm's worst downturn ever. But even the shellacking experienced has done nothing to dent the firm's conviction that fundamentals, once margin hikes and other "risk mitigation" features come and go, are as strong as ever. From the WSJ: "Despite the upheaval, the firm, led by Pierre Andurand, is exiting few positions, according to someone close to the matter. He remains bullish on oil prices, predicting that oil could hit a record $180 a barrel over the next few years, according to this person." This is all fine, but we keep banging our heads over this simple question: Just how will Joe Lavorgna be able to spin $180 oil as bullish for the economy?

Not surprisingly, in the fast paced world of levered momentum chasing, once known as hedgefunding, the first shall be last:

Andurand's bullish stance has served his investors well and made his firm among the hottest in the business. BlueGold soared 210% in 2008, 55% in 2009 and nearly 13% last year, after fees, according to an investor in the firm. Through April of this year, the firm was up nearly 17%, before fees charged to investors. The firm has rebounded from past sharp downturns, such as a 19% plunge in late 2008, according to an investor

The fund is just as upbeat this time around about the energy market. Andurand recently told an investor that this month's downturn was an aberration caused by nervous investors, some of whom piled into the market recently. Over the next few years, he argued, demand for oil will keep rising, as China grows and other emerging-market nations expand, while energy supply will remain under pressure.

The upshot: BlueGold remains long crude oil, according to someone familiar with the firm's trading. It's more lukewarm about natural gas, which has more supply coming to the market

We are still looking for an update on some other energy-heavy funds heading out of the recent crash, most notably various Tiger cubs and a couple of rather big Texas-based "hedge" funds. Incidentally, what is once superstar Ospraie up to these days?

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Thorlyx's picture

It's all bullish until it's not anymore.

CPL's picture

It's never clear where they bought in at or if they are trying to escape a position.

Franken_Stein's picture


They're all gambling men who don't wanna do real work.


disabledvet's picture

either that or "so stupid they're brilliant."

JW n FL's picture

Peter Principle of Hedgies?

JW n FL's picture

The billionaire hedge fund manager called the measure "entirely nutty" during a conference in New York last week, criticizing the law for failing to address the need for derivatives disclosure on the parts of banks.

Those banks "have become effectively the biggest hedge funds on the planet," but "opacity on extreme levels is not addressed anywhere, including Dodd-Frank." And when moderator James Millstein, a former Treasury Department official, praised the "living will" liquidation procedures for systematically important firms, Singer dismissed it.

bigwavedave's picture

shows both balls on the call and good risk management. 

H. Perowne's picture

The trend is your friend until . . . the margin hike? . . . keep trying guys, but until someone discovers transmutation, I'm OK with the PMs and oil.

chistletoe's picture

I think I read somewhere

that among professional football players in the NFL,

approximately 2/3 retire (before the age of 35!)  with some sort of permanent injury or disability.

Evidently the same principle works for "hedge" funds ....

WALLST8MY8BALL's picture

And with the Exception of having working knees, shoulders, ankles etc....



RobotTrader's picture

Proof Positive that Uncle Gorilla is determined to wipe out every single hedge fund who is betting big on:

- Peak Oil

- Higher gold and silver prices

- A collapsing dollar

- "Endgame" for the U.S. Consumer

Meanwhile funds that are betting on Fed-sponsored, Uncle Gorilla-supported consumer stocks like FOSL are making big money, and they are going to have a huge summer out at The Hamptons this summer.

Fossil is up 14% today after rocketing up from $20 to $90 already...

SheepDog-One's picture

I bet your uncle really WAS a gorilla! Monkey brains.

disabledvet's picture

i believe the emperor said "i sense a disturbance in the force."  clearly "the economy has slowed noticeably" and just as clearly "the market powers ahead in May anyway."  what are all those Bailout Tycoons to do?  Wait?  Wander?  Wonder?  I say "run that business until the lender of last resort says attaboy."

joebren's picture

A must read in the WSJ from one of Europe's new 'radical' politicans.


no life's picture

Pierre is probably shittin' a brick right about now..

Miss Expectations's picture

Hedging is for wimps.

    Zero Hedge May 2011