Pierre Andurand’s flagship commodities fund plunged 52% year‑to‑date by 23 April 2025, wiping roughly $468m from its capital. That fall cut assets from about $900m to $432m; the strategy lost roughly 19% in the opening three weeks of April amid heavy moves in oil, cocoa and copper and by mid‑June the decline had deepened to about 60%, leaving roughly $360m under management.

How the losses played out - The fund began 2025 with roughly $900m under management. - January: about a 17% decline. - February: a near 25% drop on the reduced base, per Navnoor Bawa’s analysis. - By 23 April 2025: cumulative year‑to‑date loss of about 52%, leaving roughly $432m. - By mid‑June 2025: the shortfall deepened to about 60%, reducing assets to roughly $360m. The sequence showed classic compounding when large monthly losses hit a leveraged book. Small price moves in underlying markets translated into much larger swings in the fund’s equity because positions were sizeable relative to assets and carried material leverage, leaving little margin for error. The arithmetic is stark: recovering from $360m back to $900m requires a return of roughly 150% on the remaining capital. The trades behind the fall Pierre Andurand, the manager of the fund, has long taken large directional positions in commodity futures and related markets. That approach produced oversized gains in some years and large losses in others. The recent collapse centred on a continuation of very bullish oil exposure into 2025, while material positions in cocoa and, to a lesser extent, copper amplified the downside when those markets reversed. Oil was the obvious driver. The fund’s long stance put it at odds with an environment in which supply additions — including incremental output from OPEC+ members and other producers — and softer demand projections worked to press prices lower. With leverage on top of that exposure, relatively modest price moves produced outsized equity losses. Cocoa added to the pain. The fund had enlarged its cocoa exposure in 2024 after strong gains, but cocoa prices fell sharply from late‑2024 highs into 2025. The market’s illiquidity and sudden swings produced gap moves that the fund couldn’t offset with other positions, turning a performance contributor into a major source of loss. Market and political backdrop Market conditions in early 2025 were choppy. Traders faced conflicting signals: spare capacity returned in some oil producing nations while demand growth was revised down by several forecasters. Those fundamental forces cut against a very bullish stance in oil futures. Reporting linked at least part of April’s volatility to a broader political and trade shock. Market outlets pointed to a tariff escalation by US political actors in the same period as a catalyst for risk‑off moves across commodity markets. Heightened trade tensions tend to sap demand expectations for industrial commodities such as copper and weigh on risk appetite for more speculative commodity bets. For funds that use leverage, political shocks and macro news can trigger rapid rerating of forward prices. When a market that’s been bid becomes vulnerable, liquidity can disappear and losses accelerate — especially for concentrated, directional portfolios. Risk management and liquidity strains Analysts have framed the collapse as an example of concentrated, directional risk without strict hard limits on drawdowns. The fund’s size, concentrated positions and use of leverage increased vulnerability when liquidity thinned and markets moved sharply against its exposures.

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Navnoor Bawa’s analysis records a $468m hit through 23 April 2025 and calculates that restoring assets from roughly $360m to $900m would require about a 150% return on the remaining capital.

This article was created with AI assistance.