From: Laurent Chekroun (MAKOR SECURITIES LO) At: 04/17/19 16:50:46
Subject: WSJ : Hedge Fund Slammed by Oil Looks to Take Riskier BetsHedge Fund Slammed by Oil Looks to Take Riskier Bets
Prominent oil hedge fund manager Pierre Andurand is launching a new fund that takes on more risk as a way to benefit from crude’s recovery
Pierre Andurand, a prominent oil hedge-fund manager who lost big during last year’s price slump, is launching a new fund that takes on more risk as a way to benefit from crude’s recovery.
Mr. Andurand, one of the last oil hedge-fund managers standing, has recovered somewhat this year after recording his first-ever annual loss in 2018. Brent crude, the international price gauge, has rallied more than 30% this year on production cuts by major suppliers. That sharp recovery followed a dramatic slump late last year, which pushed Brent into a steep fall.
The new fund will be able to take bigger and riskier bets than Mr. Andurand’s existing fund, according to the person familiar with the matter. The new fund, called Andurand Commodities Discretionary Fund will launch in June and have a less stringent risk profile at the full discretion of Mr. Andurand, allowing him to buy and sell more quickly in times of elevated volatility.
His current fund, the Andurand Commodities Fund, managed around $1 billion as of late last year. Mr. Andurand, who operates from an office opposite London luxury department store Harrods, predicted last June that oil prices were in a “multiyear bull run” and could hit $100 in 2018, a level unseen since 2014.
That bet turned sour as brent crude prices fell to close to $50 by end of the year. His fund recorded a 20.9% fall in October, its largest-ever monthly loss. This year, Mr. Andurand’s fund has recovered somewhat and is up 5.2% through to last Friday, according to the person familiar.
But those gains greatly lag the surge in oil prices. One factor may be self-imposed constraints his existing fund has in terms of position and leverage size. Investors often demand such risk controls as a way to prevent managers from becoming too aggressive. His new fund will allow him to bet more aggressively on prices, with a greater upside, as well as downside.
Mr. Andurand is one of the most prominent oil traders in a sector littered with casualties. Years of choppy and often falling markets have obliterated a once-prominent group of hedge funds, collectively running billions of dollars, that bet on commodities. Among firms that have shut commodities funds are Astenbeck Capital Management, Armajaro Asset Management, Clive Capital, Centaurus Capital and Brevan Howard.
Mr. Andurand has dealt with poor performance before. His previous fund closed shop in 2012. He created his new fund in 2013 and has recorded 81% net returns for investors since launching. He remains bullish on oil. In the past, he has based his view on a lack of investment in new supply from the oil industry.
Hedge Fund Slammed by Oil Looks to Take Riskier Bets
Prominent oil hedge fund manager Pierre Andurand is launching a new fund that takes on more risk as a way to benefit from crude’s recovery
Pierre Andurand, a prominent oil hedge-fund manager who lost big during last year’s price slump, is launching a new fund that takes on more risk as a way to benefit from crude’s recovery.
Mr. Andurand, one of the last oil hedge-fund managers standing, has recovered somewhat this year after recording his first-ever annual loss in 2018. Brent crude, the international price gauge, has rallied more than 30% this year on production cuts by major suppliers. That sharp recovery followed a dramatic slump late last year, which pushed Brent into a steep fall.
The new fund will be able to take bigger and riskier bets than Mr. Andurand’s existing fund, according to the person familiar with the matter. The new fund, called Andurand Commodities Discretionary Fund will launch in June and have a less stringent risk profile at the full discretion of Mr. Andurand, allowing him to buy and sell more quickly in times of elevated volatility.
His current fund, the Andurand Commodities Fund, managed around $1 billion as of late last year. Mr. Andurand, who operates from an office opposite London luxury department store Harrods, predicted last June that oil prices were in a “multiyear bull run” and could hit $100 in 2018, a level unseen since 2014.
That bet turned sour as brent crude prices fell to close to $50 by end of the year. His fund recorded a 20.9% fall in October, its largest-ever monthly loss. This year, Mr. Andurand’s fund has recovered somewhat and is up 5.2% through to last Friday, according to the person familiar.
But those gains greatly lag the surge in oil prices. One factor may be self-imposed constraints his existing fund has in terms of position and leverage size. Investors often demand such risk controls as a way to prevent managers from becoming too aggressive. His new fund will allow him to bet more aggressively on prices, with a greater upside, as well as downside.
Mr. Andurand is one of the most prominent oil traders in a sector littered with casualties. Years of choppy and often falling markets have obliterated a once-prominent group of hedge funds, collectively running billions of dollars, that bet on commodities. Among firms that have shut commodities funds are Astenbeck Capital Management, Armajaro Asset Management, Clive Capital, Centaurus Capital and Brevan Howard.
Mr. Andurand has dealt with poor performance before. His previous fund closed shop in 2012. He created his new fund in 2013 and has recorded 81% net returns for investors since launching. He remains bullish on oil. In the past, he has based his view on a lack of investment in new supply from the oil industry.
Commerzbank staff give thumbs down to Deutsche deal: survey
FRANKFURT (Reuters) - About 83 percent of Commerzbank employees who took part in a staff survey are against a merger with Deutsche Bank, according to preliminary results of the poll seen by Reuters on Wednesday.
Germany’s two largest banks said in March they were in talks to merge, a tie-up that unions have said could result in the loss of 30,000 jobs.
Opposition to the proposed deal is stronger at Commerzbank than Deutsche Bank, where a similar survey showed nearly 70 percent did not favor a tie-up.
“Distance yourselves from the merger plans,” Commerzbank’s works council wrote in an open email to the bank’s management board with the results of the survey, taken during the fifth week of merger talks between the two banks.
Commerzbank declined to comment.
Employees’ opinions count in Germany because workers make up half of companies’ supervisory boards that usually are required to sign off on mergers. The strength of feeling among staff against the merger could also help labor to win concessions from management in exchange for their support.
The survey results are preliminary because Commerzbank employees have until May 3 to give their opinions in the poll conducted by the bank’s headquarters staff works council.
Of 11,000 employees sent the survey, 5,500 had responded as of Wednesday morning, with many away for the Easter holiday. Of those who responded, 82.5 percent said the two banks should not merge, 13.7 percent that they should, and 3.8 percent had no opinion.
The potential merger with Deutsche Bank has prompted media speculation in Germany about boardroom rows at Commerzbank over the proposal. Last week, Commerzbank’s supervisory board chairman Stefan Schmittmann dismissed reports of board dissatisfaction with CEO Martin Zielke as irresponsible and unfounded.
Zielke has already tried to win over employees.
Days after the talks were announced, Zielke promised the bank’s employees a quick decision on whether to go forward with a merger, according to a memo seen by Reuters.
The Commerzbank works council has since written to the board members to protest against the merger, saying the idea lacked support among workers, customers and society.
Zielke has since met with staff to put the case for the deal.
Gapping down
In reaction to disappointing earnings/guidance:
- POL -6.7%, BK -4.6%, IBM -2.7%, SBNY -1.9%, HWC -0.9%
M&A news:
- S -7% (T-Mobile US and Sprint trade lower on WSJ report suggesting unlikely DOJ merger approval)
- TMUS -3.5%
Other news:
- ARNC -3.3% (attributed to block trade pricing)
- APHA -2.3% (proposes private offering of US$300 mln convertible senior notes due 2024 )
- NTRA -1.1% (files for $100 mln common stock shelf offering)
- FNKO -0.6% (light volume; announces that CFO Russell Nickel will step down by the end of 2019)
Analyst comments:
- CEVA -3.5% (downgraded to Neutral from Outperform at Exane BNP Paribas)
- CRON -1.8% (initiated with an Underperform at BofA/Merrill)
- SHAK -1.7% (downgraded to Neutral from Buy at Longbow)
- CMG -1.3% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
- SWKS -1.3% (downgraded to Neutral from Outperform at Macquarie )
- ON -1.1% (downgraded to Neutral from Buy at Longbow)
- CBPX -0.8% (downgraded to Sector Perform from Outperform at RBC Capital Mkts)
- TPH -0.7% (downgraded to Neutral from Positive at Susquehanna)
- CB -0.6% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
- DHI -0.6% (downgraded to Neutral from Positive at Susquehanna)
- PYPL -0.6% (downgraded to Neutral from Buy at UBS)
- CMA -0.5% (downgraded to Outperform from Strong Buy at Raymond James)
- TXN -0.5% (downgraded to Neutral from Buy at Longbow)
Gapping up
In reaction to strong earnings/guidance:
- ABB +5.4%, UAL +3.9%, CSX +3.6%, ERIC +3.3%, MS +2.7%, IBKR +2.1%, PEP +2.1%, TXT +1.6%, NFLX +1.4%, ASML +1.2%, CHCO +0.8%, PNR +0.4%, ABT +0.4%
Other news:
- SFS +20.2% (to be acquired by funds managed by affiliates of Apollo Global Management)
- UXIN +15.9% (says report published by J Capital Research contains errors of facts, misleading speculations and malicious interpretations of events)
- JMIA +13.7% (continued momentum in recent IPO)
- HOLI +13.7% (to withdraw its previously announced public offering of 7.8 mln of its ordinary shares due to market conditions)
- SELB +9.6% (to present new preclinical data from its gene and cell therapy program)
- QCOM +8.8% (continued strength on AAPL / QCOM news; also upgraded to Buy from Hold at Stifel; tgt raised to $100 from $57)
- TUFN +8% (continued volatility in recent IPO name)
- TXMD +6.7% (signed a binding commitment letter for a $300 million non-dilutive secured term loan financing facility with TPG Sixth Street Partners)
- INTC +4.1% (to exit 5G smartphone modem business; to focus 5G efforts on network infrastructure)
- ERIC +3.3% (ahead of earnings tomorrow before the open)
- ADMA +3.3% (granted U.S. Patent No. 10,259,865 related to methods of treatment and prevention of S. pneumonia infection)
Analyst comments:
- ORGO +4.4% (initiated with Outperform at Oppenheimer)
- ZSAN +3.7% (initiated with a Buy at Maxim Group; tgt $8)
- CGC +3.3% (initiated with a Buy at BofA/Merrill)
- ACB +3% (initiated with a Buy at BofA/Merrill)
- DPZ +1.8% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
- TSS +1.7% (upgraded to Buy from Neutral at Goldman)
- TDOC +1.1% (initiated with Overweight rating and $75 tgt at Stephens)
Early premarket gappersGapping up:
- SFS +19.7%, TUFN +12.7%, JMIA +10.7%, SBNY +8.9%, UXIN +6.7%, ABB +5.4%, QCOM +5.1%, ORGO +4.4%, CSX +4.1%, INTC +3.7%, CGC +3.7%, SELB +3.6%, ERIC +3.3%, ERIC +3.3%, UAL +3.1%, PEP +2.1%, TDOC +1.8%, NSC +1.7%, AAL +1.5%, ASML +1.5%, KSU +1.3%, LUV +1.2%, ADVM +1%, UNP +0.6%
Gapping down:
- NTRA -6.7%, APHA -5.6%, S -5.2%, TMUS -4.2%, IBM -3.5%, ARNC -1.9%, CMG -1.7%, SHAK -1.3%, NFLX -1.1%, HWC -0.9%, BK -0.8%, FNKO -0.6%