Calpers Beats Pickens as Commodity Indexes Clobber Hedge Funds

T. Boone Pickens, the billionaire oil trader who predicted crude's rise to $100 a barrel, is lagging behind commodity-index investors for the first time since 2003.

Even California Public Employees' Retirement System, the 75-year-old pension fund that ignored commodities until eight months ago, is beating Pickens. Calpers invested in the Standard & Poor's GSCI Index, up 32 percent this year, while Pickens's BP Capital fund rose 22 percent.

From Dwight Anderson's Ospraie Management LLC to Global Advisors LP, commodities hedge funds failed to anticipate the 58 percent advance in oil and 31 percent gain in gold that powered indexes to their highest levels in two decades. While bullish forecasters at Goldman Sachs Group Inc. and Deutsche Bank AG advised clients to double down on commodities in January, they didn't expect this year's returns.

``The commodities game has changed, and funds that have been around for a while were previously trading in markets that were less populated by other players,'' said Aoifinn Devitt, founder of Clontarf Capital, a London-based consulting firm that advises on investing in so-called alternative assets, such as hedge funds. ``Now they have less of an edge.''

The Deutsche Bank Liquid Index, the best-performing commodity index, returned 35 percent through October. Hedge funds globally in that time earned 12.3 percent, according to Chicago-based Hedge Fund Research Inc. The Standard & Poor's 500 Index of stocks appreciated 9.2 percent and U.S. Treasuries 6.6 percent, according to Merrill Lynch & Co. indexes.
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