Bloomberg- Red Kite Metals, the world’s largest hedge fund dedicated to metals, tumbled about 20 percent last month as the $2.5 billion Touradji Capital Management LP commodities fund gained.
The decline at Red Kite, co-founded by Michael Farmer, extends its loss to 29 percent this year, according to three investors in the fund who declined to be identified because the information is private. Paul Touradji’s largest fund, the $2 billion Touradji Global Resources, rose 2.5 percent last month, said two investors who declined to be identified. It’s up 21 percent to 25 percent this year, depending on the share class.
“The dispersion of returns from commodity hedge funds tend to be much higher than equity hedge funds,” said Michael Nassif, president of Geneva-based Calibria Financial Services SA, which invests in hedge funds. “They tend to use more leverage so their wins and losses are much greater.”
Commodities, the best-performing asset class this year, dropped 3.5 percent in August, as measured by the UBS Bloomberg Constant Maturity index, on concern that losses in financial markets will slow economic growth and curb demand for oil and copper. Hedge funds on average fell 1.3 percent that month, according to Chicago-based Hedge Fund Research Inc.
Agricultural commodities were the best performers last month. Wheat climbed 16 percent, while soybean meal rose 9 percent and soybeans gained 2.9 percent. Wheat traded in Chicago reached a record yesterday, surpassing $9 a bushel.
