Record losses last year incurred on the back of bullish bets on oil have prompted Pierre Andurand to reduce the risk in his Commodities Discretionary Enhanced hedge fund investment portfolio, according to a report by Bloomberg.

The report quotes Andurand in a letter to investors earlier this month which was seen by Bloomberg, saying that the market may be mispricing the potential impact of the conflict in the Middle East on crude oil, although he anticipates upside catalysts in oil and metals in the months ahead.

A leveraged bet on rising oil prices led to the Commodities Discretionary Enhanced hedge fund losing almost 55% last year — its worst ever losses — while Brent crude prices declined about 10%.

The fund's big decline comes on the back of impressive gains in the previous three years of 59% (2022), 87% (2021) and 154% (2020).