More Ebullio News: Manager Originally Reported -1.1% Loss In January, Updates That Estimate To -70%

Wow. This just gets better and better. When we told you Ebullio's manager was crazy, we didn't appreciate how right we were. Check out this Bloomberg article with some quotes from a phone interview Mr. Lars Steffensen provided to the authors. All the service providers are running like rats from a sinking ship. This will make for an awesome spectacle.

A-f'ing-mazing.

Ebullio Commodity Hedge Fund Says January Loss Was 70% Not 1.1%
2010-03-16 18:20:22.592 GMT

By Chanyaporn Chanjaroen and Tom Cahill
March 16 (Bloomberg) -- Ebullio Capital Management LLP said its commodity hedge fund fell almost 70 percent in January, not the 1.1 percent decline originally reported to investors, letters to investors show.

The 1.1 percent drop was announced in the January notice and changed to 69.65 percent in the February report, the documents show. The fund, based in Southend-on-Sea, England, fell another 86 percent last month, taking its plunge in the first two months to 96 percent. The biggest losses were in copper, nickel and tin, according to the February letter.

"The moment we knew the actual January loss, we brought that up to our investors immediately," Lars Steffensen, the founder of the company, said today by phone. He declined to comment on the size of the discrepancy.

The LMEX index of six industrial metals fell 8.2 percent in January, the steepest drop since the end of 2008, before rebounding 6 percent last month. Commodity hedge funds returned on average almost 1 percent last month and lost 2.2 percent during the first two months of this year, according to Chicago- based Hedge Fund Research Inc.

"Extraordinary circumstances" forced Ebullio "to liquidate and/or cancel parts of the physical book and liquidate some long-held speculative positions, mainly in LME non-ferrous metals," Steffensen wrote in the February report, referring to the London Metal Exchange.

Gains in oil, wheat, gold and sugar last month were "drowned out by the hugely negative impact made by copper, nickel and tin," according to the report.
Assets Under Management

Ebullio made 29 percent last year and 92 percent in 2008, according to the reports to investors. The fund’s assets under management shrank to $1.47 million last month, from $42.3 million in November.

"We took the hit," Steffensen said by phone earlier today. "I’ve always bounced back."

The fund is waiving its 2 percent management fee for 2010.

Kinetic Partners LLP, the fund’s auditor, didn’t immediately return a call to its London office seeking comment.

GlobeOp Financial Services is the fund’s administrator, according to the investor letters.

"Estimates are generally developed by fund managers based on their own estimate of profit and loss," GlobeOp Financial Services said in an e-mailed statement today. "There is generally no involvement of the administrator in the development of these estimates."

Steffensen, 42, worked for companies including Gerald Metals Inc. and Next Energy Inc. before setting up Ebullio. The fund also invests in energy, precious metals and agriculture.

Hedge funds are mostly private pools of capital whose managers participate substantially in the profit from speculation on whether the price of assets will rise or fall.

For Related News and Information:
Top commodity stories: CTOP
Top worldwide stories: TOP
To read about commodities hedge funds: TNI HEDGE CMD Top shipping stories: TOP SHIP Technical gauges: BTST
--Editors: Stuart Wallace, John Deane
To contact the reporters on this story:
Chanyaporn Chanjaroen in London at 44-20-7073-3544 or cchanjroen@bloomberg.net or; Tom Cahill in London at +44 207 673 2052 or tcahill@bloomberg.net.
To contact the editor responsible for this story:
Stuart Wallace at +44-20-7673-2388 or swallace6@bloomberg.net

Ebullio Capital Management Loses 95% In Two Months - Then Acts Like It's No Big Deal

Wow. We really don't know where to begin. TILB received an email from someone saying a manager lost 86.25% in the month of February. When TILB opened the attachment (see below), we noticed that, in fact, the manager had lost 95% in the first two months of 2010. For those of you familiar with the perils of negative compounding, the difference between losing 85% and losing 95% is an additional 67% of losses. So, we scrolled down and, wala, the manager - Lars Steffensen - actually lost 70% in January as well.

But that's not the worst of it.

His February monthly commentary basically brushes over the fact he's down 96%, as if it's just another couple of bad months! He’s literally insane. He talks about how helpful his hedges were, albeit a little too far out of the money, but that they were "money well spent," yada yada yada.

Dude! You just had a month of -70% followed by a month of -85%. In fact, in February, you actually lost more than 100% of the entire fund on metals positions alone.

He even goes on to give a fucking monthly commentary on the macro picture. Who cares what you think, dude? You’re not even talking about the fact you’ve lost 19 out of every 20 cents in 60 days. Look at this:

Since our getting long against conviction play early January 2010, we have been doing some thinking and come to the conclusion that the Japan scenario has at least been tried and tested in the real, civilized world, whereas the hyperinflation (discounting Weimar Germany and various kleptocratic African quasi States) has not.

Dude, you were down 95%. Why are you giving market commentary? What world do you live in?

After searching further back into my email box, I found this old hedge fund industry rag news snip-it on Ebullio from fall 2009:

Opalesque Exclusive: Ebullio plays hard in the commodity markets as it now owns most of the tin traded on LME - fund up 24% YTD
Thursday, October 15, 2009

By Benedicte Gravrand, Opalesque London:
We heard last week that an investor had been buying around 90% of the tin traded on the London Metal Exchange (LME), in the form of physical stocks and contracts.

Since early summer, the dominant position has caused the tin market on the LME to become "disorderly" and distorted prices, Reuters reported.

Rumors abounded but nobody knew for sure who the mystery buyer was. Then the revelation came: it was......................

TILB cannot believe they didn't lose every investor they had. Amazing. Let us know what you think.

Ebullio Capital Management February 2010 Monthly Update