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The Ebullio Commodity Fund 2010 NAV $6.83
Manager’s Commentary by Lars Steffensen
February 2010 was the worst month in the history demptions.
FUND INFORMATION of the Ebullio Commodity Fund and we regret to Ebullio Capital Management LLP is also strong and
report a return of –86.25 pct for the month, which has, as a token of confidence in the future, waived
Fund Assets: USD 1.47M
brings our total return for the year to –95.83 pct its 2 pct management fee for 2010.
(Excluding assets in Managed and to -89.63 pct since inception.
Accounts format)
Lessons have been learned from this and the chal-
Date of Inception: August 2008 Some extraordinary circumstances forced the Eb- lenges that have caused this draw-down have
ullio Commodity Fund to liquidate and/or cancel been brought under control and cannot impact us
Denomination: USD & EUR
parts of the physical book and to liquidate some again going forward.
Administrator: GlobeOp Financial
Services long held speculative positions, mainly in LME non
-ferrous metals. In our other activities, Crude, Wheat, Gold and
Auditor: Kinetic Partners LLP
Sugar made the positive impact for the month, but
Custodian: J P Morgan Most Managers would probably try to hush this up this was drowned out by the hugely negative im-
Prime Broker: Marex Financial
and not send out this Newsletter, but we have pact made by Copper, Nickel and Tin – physical,
(J P Morgan Seg Accounts) always been about transparency and having spreads and outright.
Managed Accounts:
broadcast our winning months, we are going to do
Marex the same with our (albeit quite a lot more spec- As always, and in line with our established philoso-
tacular) losers and take the heat that comes with phy and validated trading strategy of being an
Legal Advisors: Cayman—Walkers
UK—Cummings & Co. the territory. opportunistic, aggressive yet conservative Capital
The good news is that whilst our NAV is obviously Manager, we had protective options on our posi-
impacted to the low side by this, the Fund contin- tions and these options did indeed mitigate the
ues to do business as usual. The liquidity position losing scenario; however, as the options were
FUND TERMS
of the Fund is strong with in excess of USD 40 mil- quite far away from the money on the long held
Minimum Investment: $/€ 100,000
lion in cash and since the remaining physical book
positions, they only improved the month by 5 pct;
Management Fee: 2% is very profitable going forward, we view the fu-
however, they did enable us to extricate ourselves
Performance Fee: 20% ture with confidence (this confidence is being jus-
tified by our March month-to-date result which is from the awful hand that we were dealt in a rea-
High Watermark: Yes
showing a plus of more than +10 pct at the time of sonably orderly manner and so, nevertheless,
Subscription Frequency: Monthly
writing). played a major role. We still consider it money
Redemption Liquidity: Monthly
The fund has also honoured quite substantial re- well spent and essential to manage downside risk
Redemption Notice: 30 days
demptions for the Feb 1st and March 1st dealing and, as often stated on these pages, we like to
date and will continue to honour any further re- sleep at night and our commitment to the strategy
is unwavering.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2009 -1.22% 4.82% 2.12% 4.52% 2.93% 1.66% 3.12% -2.98% 7.96% 1.63% -7.72% 10.34% 29.27%
2008 3.67% 8.32% 9.31% 3.35% 2.27% 2.16% 14.39% 4.12% 1.12% 5.50% * 5.10% 8.42% 91.91%
* Managed account structure prior to October 2008
2 2 2
Ebullio Capital Management LLP 2
Drawdown days: 10
Ebullio House 1 1 1 1 1 1 1
1
Max daily drawdown: -27.42%
33 Clarence Street
0
Southend-on-Sea SS1 1BH Average daily drawdown: -9.91%
Tel: +44 (0) 1702 608 516
Average monthly return: -2.34%
Fax: +44 (0) 1702 608 510
E-Mail: marketing@ebullio.co.uk
Ebullio Capital Management LLP February
The Ebullio Commodity Fund 2010
Performance Attribution
$200.00
$0.00
Manager’s View
Either we are going to get hyperinflation and all and whilst our main focus is on extracting the
tangible assets will explode 100 pct or more to the great value inherent in our physical activity for the
upside, gold will be at $5000/oz and paper money foreseeable future, we will be placed to take ad-
is history. vantage of the eventual collapse.
Or we are getting Japan in the ‘90s with no chance Despite our very upbeat view on the future and
of inflation because consumers will save, not performance of the Ebullio Commodity Fund, we
spend no matter what the politicians do and all have obviously had a tough couple of months and
markets will be down 50/80 pct from here.
have certainly come to realize with Bad Blake
Pay your money and make your choice. (played by Oscar winning Jeff Bridges) in “Crazy
Since our getting long against conviction play early Heart”:
January 2010, we have been doing some thinking
and come to the conclusion that the Japan sce-
nario has at least been tried and tested in the real,
civilized world, whereas the hyperinflation
(discounting Weimar Germany and various klep-
tocratic African quasi States) has not. “You don’t see it
Thus we come firmly down on the Japan scenario coming, until it’s
and expect these markets to go much, much lower gone.....”
once the diversification-into-commodities-as-an-
inflation-hedge by the big pension funds and other
institutions has been done and people realize that
China cannot go it alone (just as Japan couldn’t),