A small group of hedge funds is enjoying some of the best trades in years thanks to huge volatility in shipping charter rates, fuelled most recently by the collision of the Omicron coronavirus variant with the reawakening global economy.
Dry bulk shipping rates have surged to their highest levels since the 2008 financial crisis this year while container rates have also shot up, buoyed by a recovery in global demand and congestion at ports. For consumers, that is feeding through to higher inflation. But for some specialist hedge fund traders, it is offering just the sort of big price moves they love.
Demetris Polemis, principal at Guernsey-based hedge fund Paralos Asset Management, said price rises and volatility in dry bulk rates this year have “led to some of the best trading opportunities we have seen since we started Paralos in 2011”. The fund, which manages about $450m in assets and which trades futures on the indices that make up the Baltic Dry index, has gained 110 per cent this year to the end of November, its best year of returns since launch.