Ospraie Management LLC made headlines this week when it announced plans to dismantle its flagship hedge fund. The high-flying fund boasted $3.8 billion in assets at its peak last year. But 2008 told a different story. In the month of August alone, the Ospraie Fund's portfolio shed a whopping 38 percent of its value, as its investments in energy and natural resources stocks soured, prompting the decision to dissolve.
The fund's failure would have caused little stir in the Twin Ports but for the fact that New York City-based Ospraie recently acquired a Superior grain elevator. In June, the company completed its purchase of the former Peavey Co. Elevator along with a host of other grain facilities that made up the ConAgra Trade Group, as part of a $2.8 billion deal with ConAgra Foods Inc.
But Jonathan Gasthalter, a spokesman for Ospraie, says there is no reason for concern about the future of the former ConAgra facilities now operating under a new name: Gavilon Group LLC. Gavilon's operations in Superior employ about 25 people.
"The Ospraie situation with the fund they're winding down has nothing to do with Gavilon," he said during a brief phone interview Friday.
Gavilon is not part of Ospraie's ill-fated hedge fund but is instead part of the Ospraie Special Opportunities Fund.
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Back in June, Ospraie reported it was managing a portfolio of commodities and basic industries worth about $9 billion. More than half of those assets were outside of the hedge fund.
The former Peavey elevator is one of three Twin Ports grain terminals sold to hedge fund firms in the past year. Whitebox Advisors LLC, the operator of a Minneapolis-based family of hedge funds, purchased two Duluth facilities this year: the former Cargill elevator in January and the AGP elevator in August.
"Hedge funds seem to be getting pretty deep into the grain business," said Ron Johnson, the Duluth Seaway Port Authority's trade development director.
