Andurand’s Fortunes Turn as Hedge Fund Soars 23% in November

(Bloomberg) — Pierre Andurand’s riskiest hedge fund surged last month, reviving the fortunes of his investment firm that has swung between big gains and losses this year.

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His main Andurand Commodities Discretionary Enhanced Fund, which is run with no set risk limits, jumped 23% in November to erase losses seen this year through October, according to a person with knowledge of the matter. The separate Andurand Commodities Discretionary Fund rose 13.5% last month, said the the person, who asked not to be identified because the details are private.

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The Enhanced fund is now up 13.8% this year, after being down 7.6% through October, according to the person and an investor letter seen by Bloomberg. The Discretionary fund has gained 9.3%, rebounding from a 3.7% loss recorded in the first 10 months. 

A representative for Andurand Capital Management, which managed about $900 million by the end of October, declined to comment.

Wild swings at Andurand’s hedge funds aren’t uncommon, and separate the famed oil trader from his bigger peers who’ve transitioned into producing steadier returns. This year alone, his main hedge fund has suffered double-digit monthly losses twice while also enjoying returns of more than 20% on three occasions, the investor letter shows.

Below are monthly percentage performances for the Andurand Commodities Discretionary Enhanced Fund this year:

It’s not clear what drove the performance last month, but Andurand told clients going into November that he was bullish on cocoa and copper. He also said he planned to be nimble and tactical on oil trades that Andurand revived after quitting the commodity a few months earlier.

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“Our conviction is high that cocoa prices will continue their upward trajectory and could be explosive,” Andurand wrote to clients in his letter for October, a copy of which was seen by Bloomberg. 

The energy market veteran was lured into cocoa by a huge global supply crunch caused by poor harvests in West Africa that sent prices soaring to a record in April. Futures rallied 37% in November in New York, with renewed crop worries and US port stockpiles at a two-decade low making cocoa one of this year’s hottest commodities.

Andurand also said that the firm was modestly positioned long on oil via futures and options, and planned to trade actively around any changes to OPEC+ policy or geopolitical events.

Oil prices were little changed in November, with benchmark Brent futures ending the month down 0.3%. Crude briefly flared on concerns that escalating conflict in the Middle East could disrupt exports from the region, before easing as hopes for a cease-fire between Israel and Hezbollah returned traders’ focus to faltering demand growth in China and plentiful supply from the Americas.

Meanwhile, Andurand’s bullish copper bets — which led to over half of his fund’s losses in October — may have continued to suffer. The metal slid the most in 18 months in November as the dollar surged following Donald Trump’s US election victory. 

A stronger greenback erodes the purchasing power for manufacturers buying copper using other currencies, while Trump’s threats over a trade war with China have hurt the outlook for demand.

—With assistance from Grant Smith, Mark Burton and Celia Bergin.

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