New York Post- One of last year’s best performing hedge funds has hit an epic ice patch, dropping an estimated 22 percent last month after a big bet on copper turned out to be none too shiny.<\/p>\n
The November returns stand in stark contrast to last year, when the fund was up 188 percent – a stellar performance given the fund’s nearly $1 billion size.<\/p>\n
This year will likely be entirely different, as Bloomberg quoted two investors as saying the fund was down 50 percent.<\/p>\n
November’s results mark the second month this year that Red Kite has suffered an eye-popping decline. In August, the fund posted a 20 percent drop.<\/p>\n
The likely culprit behind the decline was a combination of the slide in the price of copper and leverage. Like the prices of other popular metals such as nickel and zinc, copper prices have fallen more than 9 percent.<\/p>\n
For an aggressive trading fund like Red Kite, the fact that precious metals markets are traditionally less liquid than most bond or stock markets probably hurt as well.<\/p>\n