Hedge funds benefit from volatile ocean freight prices

A small group of hedge funds are currently enjoying the best deals in years thanks to the remarking volatility in ocean freight values, spurred more recently by the combined effects of the omicron variant of the coronavirus and the reactivation of the global economy.

Dry bulk shipping rates soared this year to their highest levels since the 2008 financial crisis, while container shipping rates have also risen sharply, buoyed by the upsurge in global demand and the resulting port congestion. For consumers, this translates into more inflation. But for some specialist hedge fund traders, it offers exactly the kind of big price changes they love.

Demetris Polemis, director of the hedge fund Paralos Asset Management, based in Guernsey, English Channel, said that rising prices and volatile dry bulk freight “have created some of the best trading opportunities since 2011”. The hedge fund, which manages about $450 million in assets and trades prospective contracts referenced in the Baltic Dry Index (which measures rates for transporting commodities such as iron ore and coal on various maritime routes), had risen 110% by November, an increase that made 2021 the best year for the fund in terms of returns.

Restrictions imposed with the emergence of the omicron variant and the high energy and commodity prices “point to a buoyant but volatile market next year,” he added.

The investment group Pilgrim Global, managed by Darren Maupin, former portfolio manager at Fidelity, has risen about 117% this year, 75% of this result was due to ocean freight prices.

Source: Valor Econômico

To read the full original article visit:

https://valor.globo.com/financas/noticia/2021/12/28/frete-volatil-e-nicho-para-fundos-hedge.ghtml

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