The biggest commodities meltdown in a generation has cost hedge funds more than $40 billion in seven years.
Losses due to poor performance and investor withdrawals have left assets at the top 10 commodities hedge funds at less than $10 billion, compared with more than $50 billion in 2008, according to estimates from Trafigura Pte Ltd.’s annual report.
The trader and asset manager said the perception of commodities as an investable asset has been replaced by a “generalized aversion.”
“Commodities as an asset class are not as attractive as before and we are seeing the consequences on our asset management division,” Trafigura Chief Financial Officer Christophe Salmon said in a phone interview. “It is probably one of the consequences of the end of the commodities supercycle.”
Trafigura last month joined other traders by shutting down its flagship Galena Metals Fund during the worst year for raw material prices since the global financial crisis of 2008. Duncan Letchford, the chief executive officer of the company’s Galena Asset Management, stepped down.
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