Monday 11 December 2017 3:43 pm

Chocfinger melts: Hedge fund famous for betting on chocolate shuts up shop

Cocoa trading king Anthony Ward, the founder of Armajaro Asset Management, announced today he has closed down his cocoa- and coffee-focused CC+ fund.

The legendary fund helped Ward earn the name “Chocfinger”, due to the massive bets he placed on cocoa seven years ago which helped drive prices to 30-year highs.

The fund’s closure follows sources revealing to Bloomberg earlier this year that the CC+ fund lost money in 2016 for the first time since its inception a decade ago.

“To be successful in this space nowadays, it’s our belief that one needs to be a large physical merchant with significant inventory and offtake agreements,” said Ward.

He added that soft commodities such as cocoa and coffee, and agricultural terminal markets, have been “overwhelmed by systems and algorithmic traders”.

"The volume of money following these systems has reached a level where the supply and demand for physical commodities is largely being ignored, and for fundamental traders like ourselves, that makes the risk/reward unattractive," he said.

However, Ward did reveal that Armajaro plans to launch a new fund in the spring of 2018.

He hinted that the idea is to move where “quant funds”, which rely on algorithms and systematic programming to make investments, “can’t go and where the barriers to entry are high”.

Armajaro said that the CC+ fund would be wound up by the end of December, and that the capital would be returned to investors.