Clive Capital Closes $4 Billion Hedge Fund to New Investors

Date: Thursday, December 10, 2009
Author: Chanyaporn Chanjaroen, Bloomberg

Clive Capital LLP closed its $3.98 billion commodities hedge fund, the world’s largest, to new money after posting its biggest monthly gain since May.

The fund returned 4 percent last month, led by precious metals and agriculture, according to two people with direct knowledge of the matter. Reopening the fund to new money will depend on its “focus and scrutiny of market liquidity and portfolio diversity,” according to a report to investors. A spokeswoman for Clive Capital declined to comment.

“Our precious book recorded strong profits for the month as we had increased our long exposure to the sector, and gold in particular, in the prior two months,” the fund, managed by Chris Levett in London, said in the 10-page report.

Gold is in the ninth year of a bull market, the longest winning streak since at least 1948, as investors seek to hedge against a weakening dollar and concern that inflation will accelerate. The metal advanced 29 percent, reaching a record $1,226.56 an ounce on Dec. 3, and attracting hedge fund managers including John Paulson, Paul Tudor Jones and David Einhorn.

Hedge funds gained 1.75 percent on average last month, taking year-to-date returns to almost 19 percent, according to Chicago-based Hedge Fund Research Inc. The Clive Fund advanced 22 percent over the same period.

Assets under management at commodity funds expanded 5.7 percent in November to $64.32 billion, according to New York- based HedgeFund.net.

Prices for commodities including gold and cocoa will probably keep advancing, Clive Capital said in its letter.

The scale of possible investors in gold has probably “expanded massively in recent months,” Clive Capital said. That “suggests that the potential for further investment flowing into the gold market is huge.”

Levett, 39, started the fund in December 2007 after leaving New York-based Moore Capital Management LLC, where he had spent four years.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net