By Tommy Wilkes and Laurence Fletcher
LONDON, Sept 20 (Reuters) - Commodity hedge fund Clive Capital is to close down, blaming a lack of investment opportunities for its poor performance and investor outflows, making it the latest commodity fund to call it a day.
“We perceive there to be limited, suitable opportunities at this point in the economic-demand and the commodity-supply cycles to enable us ... to generate the strong returns of the past,” Clive said in a letter sent out to investors on Friday.
London-based Clive, which was founded by Chris Levett in 2007 and ran about $5 billion at its peak, had made a name for itself as one of the biggest hedge funds trading in oil markets.
Levett’s personal fortune is estimated by the Sunday Times Rich List at 250 million pounds.
But Clive’s fund has lost money in each of the past three calendar years and investors have headed for the exit.
The firm said in the letter, dated Sept. 20, that it had suffered “steady redemptions” in the last two years and that assets across the firm stood above $1 billion. It will return 98 percent of investor capital in October.
Elizabeth Holstein, head of investor relations at Clive, confirmed in an emailed statement that the company had sent out a letter to investors informing them of its decision. She declined to comment further.
Clive’s main fund is down 9 percent this year to Sept. 18, after losing 8.8 percent in 2012 and 9.9 percent in 2011.
As recently as May, Clive managed $1 billion in the share class A of its main fund but this had dropped to $650 million by July, data seen by Reuters shows.
Levett’s fund follows a raft of commodity managers to have closed in the last few years.
Pierre Andurand’s high-profile BlueGold shut down in 2012 after heavy losses, while John Arnold, who left Enron when it crashed in 2002 and made billions betting on natural gas prices, announced last year that he was closing his Centaurus fund.
The sector was once lauded for delivering big returns as managers rode the long bull run in commodity prices in the early and mid-2000s, but funds have struggled to make money amid falling prices and more volatile markets since 2009.
“It’s been a tricky time for a lot of commodity funds, but they’ve had bad performance relative to several of their peers,” said one fund of funds manager, speaking on condition of anonymity.
“There’s been a really bad pattern of bad performance.”