HedgeCo.Net (New York) – New York-based hedge fund MotherRock is shutting down after having lost $230 million in June and July because of volatility in natural-gas markets and investor redemptions. At its peak in May MotherRock managed about $430 million in assets, and was formed in early 2005 by former New York Mercantile Exchange President J. Robert “Bo” Collins.

Collins wrote in a letter to investors in his MotherRock Energy Master Fund. “We are in the process of developing a detailed plan for winding down the fund,” Collins said. He said the fund would inform investors of the hit it has taken in the next two days.

The demise of the hedge fund comes after a period of high volatility in the natural gas market, after a seasonally unusual draw in gas from storage last week and a rally fueled by a heat wave across much of the United States.

New York gas prices dropped 66 percent from an all-time high in December as a mild winter created supply and then rallied in the second half of July. While prices for summer fell, contracts for next winter stayed unusually high, widening the price differential or spread.

MotherRock had “significant losses” in July, though a final tally was not yet available, Collins said in the letter, obtained by Bloomberg News. The timing of the shutdown has not been established, according to the letter.

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net

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