Centaurus’ Arnold Lost 3.27 Percent in 2010

In 2010, Centaurus Energy’s John Arnold, the former Enron energy trader, lost money for the first time since he launched his $5 billion hedge fund eight years ago.


Centaurus Energy’s John Arnold is human after all. The former Enron energy trader in 2010 lost money for the first time since he launched his $5 billion hedge fund eight years ago. Arnold finished the year down 3.27 percent, according to investors.

We had previously reported the Houston-based natural gas trader was down 2.7 percent through October. This was after racking up a 7.9 percent gain that month, according to knowledgeable sources. Apparently, he was roughly flat the last two months.

Natural gas prices had mostly been on a tear since the end of the summer. It had been thought that Arnold might have been long in October, and if he stayed with that position, probably managed to move into the black by the end of November. But, it is not clear how he was positioned for the final two months of the year.

Arnold joined Enron in 1995 after graduating in three years from Vanderbilt University with a B.A. in science. He launched Centaurus in 2002 with the $8 million bonus he received from Enron after making the firm $750 million.

Arnold quickly attracted attention when he posted a 160 percent return in 2005 and 200 percent in 2006. In 2007 and 2008 he was up another 50 percent or so in each of the years. In 2009, he was only up 29.2 percent.


Last year, Arnold stepped out from the shadows to testify in Washington, D.C., arguing against The Commodities Futures Trading Commission’s proposed restrictions on position limits. “If allowed to take effect as currently structured, the new [position limits] will have a range of detrimental effects on the market,” he reportedly stated in a rare public appearance. However, he does support limits on trading in NYMEX physical delivery contracts.

In early January, the NYMEX Business Conduct Committee found that Centaurus Energy Master Fund LP violated exchange rules regarding position limits for Henry Hub Natural Gas Look-Alike Last Day Financial Futures contracts. This was the third position limit violation for Centaurus in the past 24 months, the exchange said.