(Bloomberg) — Izzy Englander’s Millennium Management earned about $600 million from commodities investments in 2023, people familiar with the matter said, as the asset class powers returns at some of the world’s largest hedge funds.
The gains came partly from solid performance from natural gas and power trading, two of the people said. Millennium’s profit from commodities was roughly the same in 2022, the people said. Millennium declined to comment.
Some hedge funds have generated strong results from commodities trading in the past two years, particularly in natural gas and power, amid surging volatility sparked by Russia’s invasion of Ukraine. Among large funds, Citadel’s commodity-trading business has been a standout, making more than $4 billion in 2023 and representing about half of overall profits in the last two years.
Read More: Citadel Made More Than $4 Billion From Commodities in 2023
Even smaller firms have benefited, such as Miami-based Statar Capital LLC, which doubled its investment on European natural gas options recently in a move traders called “the trade of the year.”
Millennium, which manages more than $62 billion in assets, has made a series of changes in its commodities division in recent years, including splitting it into a separate unit under Anthony Dewell last year. The firm recently hired Matthew Nguyen as deputy head of commodities.
Overall, Millennium gained about 10% in 2023, outstripping many other multistrategy firms, which had single-digit returns.
While the boom in commodities trading activity and hiring seen in 2022 slowed in 2023, multistrategy firms such as Balyasny Asset Management are still seeking to grow in the sector and adding traders across the world. Investors have also shown some appetite for independent commodity funds. Trafigura Group derivatives trader Tristan Almada recently left to set up an eponymous commodities-focused hedge fund.
–With assistance from Hema Parmar.
©2024 Bloomberg L.P.
