Asteri Capital and the London Whale: A secret history of Glencore's hedge fund
WELCOME TO OUR TREASURY: HERE BE DRAGONS The global commodity trading giant Glencore once had an internal hedge fund that made proprietary bets on global markets. It was called Asteri Capital . What do you think it bet on? Most people would probably make an educated guess and say commodities, but they'd be wrong. It bet on global credit markets, bonds, structured credit products and credit derivatives that have nothing to do with commodities. Weirdness level 1: Why did Glencore have a credit hedge fund? Ok, that's pretty weird. Why would a commodity company like Glencore have a bond-trading hedge fund? Asteri Capital actually started life as something called Glencore Finance AG, and was, for all intents and purposes, just a proprietary trading desk within Glencore, based out of its 50 Berkeley Street office in London. It furthermore appears that it was originally just part of Glencore's treasury , the part of the firm that deals with things like borrowing money for the da...