Andurand Hedge Fund Closes New York Office, Loses Traders

(Bloomberg) -- Commodities hedge fund manager Pierre Andurand closed his firm’s New York office after a tough trading year in 2018, instead focusing the business on his offices in London and Malta, according to people familiar with the matter.

Andurand Capital LP, led by the eponymous trader famous for his bullish oil calls, has seen some portfolio managers and staff leave the firm recently, the same people said, asking not to be named discussing private information. The New York office, which opened in late 2017 and had just a few employees, was closed in November, another person said, adding that the hedge fund’s plan was always to reevaluate the need for an American base after one year.

Tristan Almada, who was based in New York, left the hedge fund in recent weeks to join commodities trading house Trafigura Group Ltd. in Geneva. Pascal Forest, another Andurand trader, also left the hedge fund earlier this year.

The departures come after Andurand, one of the oil market’s last remaining hedge fund managers, lost 20 percent in 2018 in his first annual decline since launching his fund five years ago. The firm has seen its assets under managements dropping to "approximately $800 million" last month, according to a March presentation seen by Bloomberg, down from more than $1 billion in the third quarter of last year.

Global Team

Andurand Capital has now a global team of 24 people -- with six under its investment team -- and offices in London and Malta, the presentation showed.

Andurand Capital and Trafigura declined to comment.

The hedge fund manager offered a nuanced view of the oil market in the presentation. On the one hand, he told investors that U.S. shale "can grow healthily" with West Texas Intermediate above $50-$55 a barrel. On the other hand, he said that Saudi Arabia "needs +$80 a barrel to solve their budget deficit."

In his presentation, Andurand called new ship-fuel rules, known as IMO 2020, a "once-in-a-generation trading opportunity." In particular, he highlighted the chance to go "long crude" as refiners will increase utilization "significantly" to try to meet a spike in diesel demand. Also, he suggested buying diesel crack spreads -- the difference between diesel and crude -- and selling fuel oil crack spreads, saying that refiners will fail to produce enough diesel, while the new rules will "destroy" demand for fuel oil.

"Is this 2020 regulatory change priced in the market? No," Andurand said, according to the presentation, arguing that forward prices for diesel cracks were too low "given the upcoming diesel demand spike in 2020."

To contact the reporters on this story: Javier Blas in London at jblas3@bloomberg.net;Catherine Ngai in New York at cngai16@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Jessica Summers

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