Andurand’s Oil Hedge Fund Suffers Second Consecutive Annual Loss

(Bloomberg) -- Pierre Andurand, one of the oil market’s last remaining hedge fund managers, posted his second consecutive annual loss with a 7.1% decline in 2019, according to people familiar with the matter.

The loss at Andurand Commodities Fund further darkens the picture for the industry, which over the last five years has seen many high-profile managers shutting down their flagship commodity hedge funds while others suffered large losses that spooked investors.

A company representative declined to comment.

Andurand, traditionally among the most bullish oil investors, struggled in a market buffeted by pipeline outages, dramatic changes in ship-fuel regulations and Middle East conflicts. The same conditions, however, created a bonanza for physical oil traders, delivering billions of dollars in profits.

Brent crude, the world’s most important benchmark, rose almost 23% through last year. It traded in a relatively narrow range of $52.51 to $75.60 a barrel throughout 2019, but the stability masked significant brief spikes, including one after a major Russian pipeline suffered a contaminated crude crisis that crippled supplies into Europe, and another after an attack on the biggest Saudi oil processing facility.

The fund’s 2019 loss is the second consecutive annual drop for Andurand after it plunged 20% in 2018, the same people said, asking not to be named as the information is private. Since he launched his current hedge fund about seven years ago, Andurand had delivered largely strong results until 2018. In 2014, for example, the fund gained 38%, and he delivered another double digit gain in 2016 and 2013, the same people said.

Oil and commodities hedge funds have struggled in recent years, with many high-profile managers shutting down their operations. Andy Hall, a trader so revered in the oil market that some called him “God,” shut his Astenbeck Master Commodities Fund II Ltd. in 2017. In another set back for the commodity trading industry, Northlander Commodity Advisors LP suffered a 50.6% fall last year, a spectacular reversal from its 2018 position as a darling of the hedge fund industry.

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