Pierre Andurand is a French businessman and hedge fund manager with an impressive track record in the energy markets. Born in February 1977, he has established himself as one of the most successful commodity traders globally.
Andurand’s funds have approximately $2 billion in assets under management, with cumulative returns ranging between 900% and 1,300% for investors since 2008. He is also the majority shareholder of Glory, an international kickboxing league.
As the fund manager of Andurand Capital Management, which he founded in 2013, Andurand has consistently delivered extraordinary returns through his specialized focus on energy markets, particularly oil. His unique background and analytical approach have positioned him among the elite fund managers in the world.
Key Takeaways
- Pierre Andurand is a renowned hedge fund manager with a strong track record in energy markets.
- Andurand Capital Management has delivered cumulative returns of 900-1,300% since 2008.
- Andurand’s expertise in oil markets has contributed to his success.
- He is also the majority shareholder of the international kickboxing league Glory.
- Andurand’s analytical approach and trading methodology have been key to his achievements.
The Rise of a Commodity Trading Legend
From the pools of competitive swimming to the trenches of commodity trading, Pierre Andurand’s story is one of discipline and strategic growth. As a young athlete, Andurand demonstrated a level of dedication and competitive drive that would later serve him well in the financial markets.
From Swimming Champion to Financial Markets
A keen swimmer in his youth, Andurand was a member of the French National Junior Swimming Team in 1993 and 1994. This experience instilled in him the discipline, competitive drive, and mental fortitude that are crucial for success in trading. As he transitioned from swimming to academics and eventually to a career in finance, Andurand leveraged the skills he developed as an athlete to navigate the complexities of the financial markets.
“The discipline required to be a competitive swimmer is not dissimilar to that needed to succeed in trading,” Andurand’s career trajectory illustrates. Over the years, his ability to adapt and grow as a trader has been instrumental in his success.
Educational Background and Early Career Aspirations
Andurand’s educational background is marked by a series of advanced degrees from prestigious institutions. He holds MSc degrees in Applied Mathematics from the Institut National des Sciences Appliquées, International Finance from École des Hautes Études Commerciales de Paris, Computer Science from Columbia University, Mathematical and Theoretical Physics from the University of Oxford, and Astrophysics from Queen Mary University of London. This multidisciplinary academic foundation provided Andurand with unique analytical capabilities that differentiated him from other traders in the commodity markets.
As Andurand navigated his early career, his educational background and formative experiences as a swimmer shaped his approach to risk, competition, and strategic thinking. These elements would become hallmarks of his trading style in later years, contributing to his growth as a respected figure in commodity trading.
Pierre Andurand – Founder – Andurand Capital: Career Evolution
The evolution of Pierre Andurand’s career is marked by significant milestones in major financial institutions. His journey from a young trader to the founder of Andurand Capital is a testament to his expertise and adaptability in the commodity trading sector.
Goldman Sachs and Bank of America Years
Pierre Andurand began his career in commodity trading at Goldman Sachs in Singapore, where he worked as an oil trader. His tenure at Goldman Sachs laid the foundation for his future success by providing him with essential skills and industry connections. After Goldman Sachs, Andurand joined Bank of America Singapore as a Principal in oil trading, further refining his trading approach and expanding his expertise in energy markets.
During his time at these prestigious institutions, Andurand developed a strong understanding of the commodity markets, particularly oil trading. His experience at Goldman Sachs and Bank of America was instrumental in shaping his trading methodology and preparing him for future challenges.
The Vitol Partnership Experience
Andurand’s career accelerated significantly when he joined Vitol in Singapore as a trading manager. He was later promoted to partner and became one of the company’s most successful traders, reportedly earning a $20 million bonus in one particularly successful year. This experience not only honed his trading skills but also taught him the importance of strategic risk management.
BlueGold Capital: Founding and Performance
In October 2007, Andurand co-founded BlueGold Capital, a hedge-fund investment group. As the majority shareholder and Chief Investment Officer, he led the BlueGold Global Fund to remarkable returns. Launched in February 2008 with $300 million in assets under management, the fund’s returns were described as “eye-popping” and “monstrous” by the New York Post. The fund peaked at $2.4 billion in assets under management, with returns of 210% in 2008, 55% in 2009, 13% in 2010, and -34% in 2011.
| Year | Returns (%) | Assets Under Management ($ billion) |
|---|---|---|
| 2008 | 210 | 0.3 |
| 2009 | 55 | 1.2 |
| 2010 | 13 | 2.0 |
| 2011 | -34 | 2.4 |
BlueGold was closed in April 2012, and Andurand subsequently launched Andurand Capital in February 2013. The experience and lessons gained from his previous ventures were crucial in shaping the investment strategy and structure of his new fund.
Investment Philosophy and Trading Approach
At the heart of Andurand Capital’s success lies a sophisticated investment philosophy that combines rigorous risk management with a keen eye for asymmetric opportunities. Pierre Andurand’s approach to commodity trading is built on a foundation of disciplined risk assessment and a strategic focus on trades with highly favorable risk-reward profiles.
Risk Management Framework
Andurand Capital employs a sophisticated risk management framework that is more stringent than its predecessor, BlueGold. The fund operates with lower net leverage and has implemented a tiered risk reduction ladder. This system mandates staggered cuts in Value at Risk (VaR) at specific drawdown thresholds of 3%, 8%, and 11%. Maximum VaR has been capped at 2.25%, with an average of 1.3% in 2014, significantly reducing the risk exposure.
Asymmetric Risk-Reward Strategy
Pierre Andurand is renowned for his asymmetric risk-reward strategy, seeking trades with potential upside-to-downside ratios of 3.5:1 or better. This approach involves risking one unit to potentially gain 10, 20, or even 40 units. Andurand’s strategy is centered on identifying lucrative opportunities where the potential for significant gains far outweighs the risk of loss.
Market Analysis Methodology
Andurand’s market analysis methodology integrates multiple disciplines, including geopolitics, economic policy, supply-demand dynamics, and market psychology. This comprehensive approach enables Andurand Capital to identify market inefficiencies and capitalize on them effectively. By combining these various analytical frameworks, Andurand creates a robust market analysis strategy that few traders can replicate.
The disciplined methodology employed by Andurand Capital creates sustainable competitive advantages in identifying market inefficiencies and capitalizing on them. This approach differs significantly from conventional commodity traders, offering a unique strategy that has consistently generated exceptional returns in volatile commodity markets.
Notable Trading Successes and Market Calls
Pierre Andurand’s reputation as a skilled energy trader is built on his ability to make accurate market predictions. His trading career is characterized by a deep understanding of the energy market, allowing him to navigate complex market conditions effectively.
The 2008 Oil Price Crash: Capturing Both Sides
In his best year ever, 2008, Andurand’s BlueGold Capital Management successfully captured both the parabolic rise in oil prices to their peak and the subsequent collapse. This remarkable feat demonstrated Andurand’s ability to adapt quickly to changingmarket conditions. Theoil price crashin 2008 was a significant event that tested the skills of many traders, but Andurand’s performance stood out.
Brent Crude and WTI Spread Trades
In 2013, Andurand identified an opportunity in the spread between Brent Crude and West Texas Intermediate (WTI), two leading global futures contracts. He correctly anticipated that new pipelines between Cushing, Oklahoma, and the Gulf Coast would collapse the spread between WTI and the Gulf Coast benchmark, Louisiana Light Sweet (LLS). Andurand’s thesis played out with remarkable speed as the spread compressed from $17 to zero in a matter of months.
The 2014-2015 Oil Market Downturn
During the first eight months of 2014, Andurand maintained a neutral to bullish bias, believing that the market would remain balanced due to offsetting factors such as US shale production growth and supply disruptions from North Africa and the Middle East. However, in September 2014, he began to change his mind based on data points such as slowed oil demand growth, increased production from Iran and Libya, and rising non-OPEC supply. After the November OPEC meeting failed to cut production, Andurand increased his short position, ultimately profiting from the sharp fall in oil prices.
Andurand’s successful trades exemplify histrading methodology, which combines fundamental analysis, contrarian thinking, patience in position building, and decisive action when conviction is high. His ability to identify inflection points in the market has been a key factor in his success.
Beyond Oil Trading: Diversification and Ventures
Pierre Andurand’s business ventures extend far beyond the realm of oil trading, showcasing his strategic diversification into emerging energy markets and sports. This diversification is a testament to his entrepreneurial mindset and ability to leverage his expertise across different domains.
The Andurand Climate and Energy Transition Fund
In July 2021, Andurand launched the Andurand Climate and Energy Transition Fund, marking a significant step into the green energy transition space. By January 2022, this fund had returned 28%, demonstrating Andurand’s ability to apply his energy market expertise to emerging trends. This venture represents both a strategic diversification for Andurand Capital and a forward-looking investment approach.
Glory Kickboxing: From Passion to Business
Andurand’s passion for martial arts led to his involvement in kickboxing. After rival series K-1 faced financial difficulties, Andurand acquired and revitalized Glory Kickboxing. In 2016, Glory Sports International secured a Series B investment round, with Yao Capital and Liberty Global participating, validating Andurand’s business acumen beyond hedge fund management.
These diverse ventures reflect Andurand’s skill in building effective teams and partnerships, managing businesses outside his core focus on energy trading. By diversifying his investments, Andurand is positioning himself for continued success in a rapidly changing global market.
Conclusion: Pierre Andurand’s Legacy in Commodity Trading
Pierre Andurand’s track record makes his strategy one of the top performers in any category, not just within the commodities space. With the combined performance of BlueGold and Andurand Capital yielding annualized returns of 35.7% between 2008 and 2015, his achievements are comparable to those of legendary investors like George Soros and Stanley Druckenmiller.
Andurand’s consistent success across multiple market cycles and oil price environments distinguishes him from traders who succeed only in specific market conditions. His disciplined risk management approach, asymmetric trading strategy, and deep fundamental analysis of oil supply and demand dynamics have created a sustainable competitive advantage.
As a result, Andurand’s legacy extends beyond his personal trading success to influence commodity market trading methodologies and risk management practices. His career trajectory exemplifies the qualities of adaptability, disciplined risk-taking, and continuous learning that characterize exceptional market participants, making him a leading figure in the world of commodity trading and hedge fund management.