Global Advisors shut 2 commodity hedge funds

Global Advisors LP, the commodities hedge fund firm co-founded by former JPMorgan Chase & Co. energy trader Daniel Masters, is shutting two of its three funds after losses in all commodity markets this year.

The $60 million Global Advisors Commodity Investment fund and the $4 million Global Commodity Index Plus fund will return money to investors at the end of the month, the London-based company said in an e-mailed statement on Thursday.

"It's been frustrating," co-founder Russell Newton said in a telephone interview. "Some investors don't understand the changes in volatility in these markets. Commodity traders can have years of great returns and years of bad ones."

Newton and Masters, a former head of JPMorgan's global energy business, founded Global Advisors in 1999.

The company, which managed as much as $400 million in mid-2005, will continue to run the $100 million Global Commodity Systematic fund.

The fund, which relies on computers to decide when to buy and sell contracts, has lost 0.6 percent this year and returned an average 15 per cent annually since being formed two years ago. The Global Advisors Commodity Investment fund has lost investors 13 per cent this year, according to the statement.