Ospraie Hedge Fund Muffs Metals Rally

Surging commodity prices have enriched much of Wall Street this year, but not investors in Ospraie Management.

At the end of April, the $4 billion hedge fund group, which specializes in betting on metals and other commodities, was down a little more than 10% for the year in its flagship fund. People familiar with Ospraie say the fund has taken a beating this year due to a series of bearish bets on the price of copper and silver, both of which are soaring to new heights.

Sources say Ospraie was net short on copper and silver until recently. Earlier this week, the Financial Times reported that Ospraie was closing out many of its short positions in copper and that the hedge fund's short-covering had fueled an additional spike in copper prices over the past few weeks. ...