One Of The Largest Commodity Hedge Funds Shuts Down

Less than five years ago, commodity and macro markets trader Stephen Jamison was facing an avalanche of clients desperate to give his Jamison Capital Partners money to manage, ultimately forcing him to close his macro commodity fund to new investors after nearly doubling its capital to $1.5 billion in 2012, making it one of the biggest players in the commodity space. Jamison, a former Morgan Stanley trader, mainly invested in commodities but “would turn to other assets such as treasuries and equities when he sees better opportunities.”

Fast forward to today when things are decidedly bleaker for Jamison and his Jamison Capital, because as Reuters reports, the New York-based commodity hedge fund will be shutting its nearly $1.5 billion macro commodity fund and converting to a family office, a source familiar with the matter said on Thursday.

It won’t be the first commodity/macro fund to admit defeat in a market in which nothing makes sense. The closure of Jamison, one of the largest commodity-focused hedge funds, comes after several other big names have closed shop in recent months. They include hedge fund manager Andy Hall, who closed his Astenbeck Capital Management last summer, and Texas tycoon T. Boone Pickens, who said this month that he was closing his fund, in part due to declining health.

Performance did not help: Jamison was down 9% last year, Reuters cites sources familiar, partially due to losses on natural gas in the second half of the year.

It was a bad year for many: numerous trading firms and banks reported poor results in 2017 due to muted client activity and wild fluctuations across energy markets. As we reported previously, Goldman Sachs said the second quarter of 2017 was its worst quarter on record in commodities, which was also due to a nat gas bet gone bad:

“Goldman wagered that gas prices in the Marcellus Shale in Ohio and Pennsylvania would rise with the construction of new pipelines to carry gas out of the region, said people familiar with the matter. Instead, prices there fell sharply in May and June as a key pipeline ran into problems.”

It was not immediately clear if, like Pierre Andurand’s closure last year, any residual liquidation of asset holdings would impact the market.

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