Many oil traders at respected institutions worldwide have been caught flat-footed and on the wrong side of the trade amid struggling oil prices. The thesis that the historic OPEC and Russian production cap deal would gradually drain the world of excess oil supplies was called into question following a sharp rise in North American shale production and rising output from Iraq, Libya, and Nigeria.
During the commodities boom years up into 2014, hedge funds focused in commodities made incredible, outsized gains as prices shot higher and remained elevated. Since the collapse of oil prices - and the more widespread collapse of various sectors of the commodities market - these same funds have mostly suffered from underperformance due to the concentrated, leveraged nature of their positions.
Read an in-depth overview of the closing down of the Astenbeck Hedge Fund here: https://www.wsj.com/articles/oil-trader-andrew-hall-is-closing-his-astenbeck-hedge-fund-1501776384
----
Past performance of wealth managers - sometimes the result of educated guesses that yielded wildly successful results - doesn't always guarantee that future investments will be successful.
Andrew Hall gained respect, fame, and wealth through his call of an oil bottom in 2003, in which he bought futures contracts years ahead that reaped a fortune as oil prices recovered.
John Paulson comes to mind. He personally gained almost $5 billion in profits by effectively betting against the U.S. subprime mortgage lending market just prior to the financial crisis, but has struggled attracting client funds and recently closed down an albeit smaller fund. Perhaps speaking to his contrarian investment successes, the closed fund specialized in shorting the current equity market.
John Paulson recently closed down a fund too https://www.bloomberg.com/news/articles/2017-07-27/paulson-winds-down-long-short-equity-fund-amid-strategy-refocus
In a somewhat related case, Eddie Lampert went from a rising hedge fund star to superstardom - and billionaire status - after he negotiated the takeover of a bankrupt K-mart and used the resulting company to acquire retail giant Sears, Roebuck and Co. Since that time, he has tried his hand at managing Sears Holdings, with very limited success to say the least.
The Street was very blunt in its assessment of struggling Sears Holdings https://www.thestreet.com/story/14232336/1/sears-is-still-headed-for-a-fiery-ugly-death-despite-200-million-gift-from-its-best-friend.html
