Kamunting Street Capital, formerly a $1 billion hedge fund, is shutting down.
The hedge fund bet on energy junk bonds over the past year, and lost some of its fortune as oil crashed, according to the Wall Street Journal’s Rob Copeland.
The fund lost 4% last year and was down 2% so far this year. Since it opened in 2004, the fund had returned its clients around 8% a year after fees.
Bloomberg’s Simone Foxman reported that the fund’s founder, Allan Teh, said one of the firm’s largest investors pulled its money after they were “no longer interested in having a large exposure to the credit strategy he trades.”
When reached by Business Insider, a representative said the fund had no comment.
Teh previously ran a now defunct hedge fund unit at Citi before leaving to start his own hedge fund in 2004.
Since last year, oil prices have declined about 50% amid a glut in supply that shows few signs of letting up.?
On Wednesday, data from the Energy Information Administration showed that oil inventories in the US continue to grow, increasing 10.5 million barrels last week to another 80-year high. This sent West Texas Intermediate crude oil prices down more than 5%.?
On Thursday, oil prices were up about 1% to $51 a barrel.?
In the last several months, we’ve begun to see the fallout from the oil crash, with small energy company American Eagle Energy saying in early March that it was running into trouble paying back its lender. Quiksilver Energy also filed for bankruptcy protection in March after struggling to settle its $2.35 billion in debt.?
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