Commodities Hedge Fund Giant Andurand Achieves 82.5% Return Amid Soaring Energy Prices

By Julia Payne

LONDON (Reuters) – Hedge fund manager Pierre Andurand’s Andurand Commodities Discretionary Enhanced Fund has seen an impressive increase of 82.5% this year as of October 1, driven by surging energy prices, according to a source familiar with the situation.

The discretionary fund operates with unrestricted risk limits and experienced a remarkable 20% surge in September alone, fueled by rising natural gas prices in the U.S. and Europe, along with escalating European power and oil prices.

Additionally, Andurand’s flagship fund, the Andurand Commodities Fund, recorded a 33% increase by October 1, as noted by the anonymous source.

Global gas prices, particularly in Europe, have skyrocketed in the past month due to supply shortages, high demand from Asia, and dwindling inventories. The Dutch front-month wholesale gas price, serving as the European benchmark, soared to an unprecedented high of 100 euros per megawatt hour recently, while U.S. gas prices reached their highest point in 12 years.

These dramatic price shifts have led trading firms to experience significant liquidity constraints due to massive margin calls amounting to hundreds of millions of dollars on gas futures.

Last year, Andurand’s discretionary fund achieved an extraordinary 154% gain, while the flagship fund rose by 68.6%, following the upheaval in energy markets due to the COVID-19 pandemic in 2020.

During the early phase of the pandemic, Andurand shorted oil and reaped substantial profits when global oil demand and prices plummeted during the peak of lockdowns, before rebounding later in the year.

Although oil demand has not yet fully returned to pre-pandemic levels, futures recently reached a three-year high, with U.S. West Texas Intermediate (WTI) futures climbing to their highest level since 2014.