WEST PALM BEACH, FL (www.hedgeco.net) – Two Chicago area hedge funds suffered significant losses from energy trades, according to people familiar with the situation. Citadel Investment Group LLC, one of the largest hedge fund managers, lost nearly $150 million from such trades.<\/p>\n
The second hedge fund, Ritchie Capital Management LLC, lost an estimated $150 million. According to the report, Hurricane Katrina may have been partially responsible for the losses on energy installations in the Gulf of Mexico. The losses were a direct consequence of the hurricane, which disrupted natural gas production in the region, thereby giving rise to high natural gas prices.<\/p>\n
The head of Citadel\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s energy trading unit, Scott Rose, has resigned from the firm as a consequence of such losses. Two other energy traders at Ritchie Capital Management, Todd Orosco and Joe Skubisz have reportedly resigned from the firm, according to the source.<\/p>\n
Citadel declined to confirm reports of the losses; it however acknowledged that its head of energy trading, Scott Rose, has resigned from the firm on September 12. Citadel\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s chief executive told Reuters, \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cThe performance of the (energy) business has not met expectations.”<\/p>\n
A Ritchie Capital Management spokeswoman also declined comment on the losses. Ritchie manages about $3 billion in total investor assets. Citadel is one of the largest hedge fund managers, overseeing about $12 billion in assets.<\/p>\n
<\/p>\n
Paul Oranika
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net<\/p>\n
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