Brevan Howard Asset Management will shut its commodity hedge fund, the Wall Street Journal has reported.
Citing two people familiar with the matter, the paper said recent poor performance has led the firm to close its $630 million fund managed by UK Partner Stephane Nicolas.
It was also reported the fund has fallen nearly 4.3% through the end of October and 4.2% in 2013. It also plummeted 10.3% in September, according to sources.
The Saint Helier, Jersey-based firm did not respond to a request for confirmation.
Data from eVestment revealed commodity strategies have been underperforming across the board. For the month of October, commodities posted losses of 1.33%. The strategies also fell 0.42% in average returns for the first 10 months of 2014 and 3.02% in 2013.
Numerous banks have also exited the commodities business citing low revenues in the sector.
In late June, JP Morgan sold its physical commodities arm for $3.5 billion to Swiss trading house Mercuria. Credit Suisse also announced in July it would shut its commodities trading business as a way to trim the “non-strategic” parts of its investment bank.
“The restructuring of our macro business, including the exit from commodities trading, is expected to drive further capital, leverage, and expense reductions,” Brady Dougan, Credit Suisse’s CEO, said. He also stated that resources previously used in commodities trading would be reallocated to “more profitable businesses.”
Brevan Howard also shut a $2.7 billion emerging market fund earlier this year following a 15% loss in 2013. Then-manager and leader Geraldine Sundstrom subsequently left to join PIMCO in June.
The firm is one of Europe’s largest hedge fund managers with $37 billion in total assets. Its Co-Founder Alan Howard manages the $26.5 billion flagship macro fund.
Related Content: The Incredible Shrinking Hedge Funds Universe; Credit Suisse Quits Commodities Trading in Litigation Aftermath