Reuters logo
On the rebound, Taylor Woods commodity fund reopens to investors
May 30, 2013 / 5:48 PM / 5 years ago

On the rebound, Taylor Woods commodity fund reopens to investors

* Fund up 10 pct on year after 2 years of decline

* Eyes new investors as AUM dips to $800 mln from $1.2 bln

By Barani Krishnan

NEW YORK, May 30 (Reuters) - Taylor Woods Capital, the commodities fund of ex-Credit Suisse gas trader George “Beau” Taylor, is up double digits for the year and is seeking new investors to replace capital lost in redemptions after a previously sluggish performance, industry sources said.

The fund, based in Greenwich, Connecticut, stopped accepting investor money in March last year after raising $1.2 billion in just over a year, more than twice its targeted $500 million.

Prices of many commodities plunged after Taylor Woods “hard closed” to investors, and Brent crude oil, one of its main plays, was range-bound for months, leaving the fund with a second year of losses that caused some investors to pull out.

This year, Taylor Woods’ Master Fund is up about 10 percent through May 29, profiting from the outsized moves in Brent, and other winning bets placed on coal, natural gas, base metals and currencies, sources familiar with the fund’s performance said.

The firm is, meanwhile, trying to bring its assets under management back to above the $1 billion mark, after they fell to around $800 million in the first quarter.

The new investors it is looking at are mainly institutional-types, such as pensions, that have a greater tolerance toward less-than-stellar returns.

“The idea is to bring in stickier money, versus the more fickle cash you get from fund-of-funds that rotate their portfolios more frequently,” said a source with knowledge of the company’s capital raising efforts.

About two-thirds of Taylor Woods’ investor base is already institutional, the source said.

Taylors Woods declined comment.

Its gains for this year have put the firm at the upper end of commodity fund rankings, going by data available through April from fund trackers. According to Chicago-based Hedge Fund Research, the average commodity hedge fund rose 1.8 percent over the four months. The energy funds index on New York’s e-Vestment Alliance gained 5.4 percent.

Taylor, 42, started Taylor Woods in February 2011 with a seed capital of $150 million from Blackstone Group. The firm soon doubled that money, then went on a fundraising blitz that brought in nearly $1 billion more by March 2012.

“It was remarkable that they went from $100 million to over $1 billion in such a short time,” said Charles Gradante, co-founder of New York’s Hennessee Group, which invests with hedge funds although not with Taylor Woods.

“The risk, of course, was that they could also be hit by a remarkable amount of redemptions if their investors had very high expectations, or if the investor base wasn’t large enough to absorb the exits of a few.”

Right after Taylor Woods capped its fundraising, it was hit by one of the worst commodity sell-offs since the financial crisis. The 19-commodity Thomson Reuters-Jefferies CRB index fell nearly 11 percent in May last year as fears over the euro zone debt crisis escalated.

Brent, a commodity Taylor had been particularly bullish on, had its steepest monthly decline in two years that May, falling from a high of just above $120 a barrel into the $104-$111 range through the second half of the year.

Taylor Woods posted gains for six months last year, but still finished the year down about 2 percent, extending its near 5 percent slide in 2011. Redemptions followed.

This year, the fund has been up in the three months through May, capitalizing on the swings in Brent since February, a slump in coal prices and rally in natural gas.

On Thursday, Brent was at around $102 a barrel, after slipping to below $99 on May 1 and rising to nearly $120 in early February. Coal for delivery in Europe next year hovered at $90 a tonne versus an early January high above $102. U.S. natural gas is up 21 percent on the year, at above $4 per million British thermal units (mmBtu). (Editing by Bernadette Baum)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below