MINNETONKA, Minn. - Privately held Cargill, the world's largest commodities trading firm and a highly secretive company, lost about $100 million in March in its Minnetonka Fund, USA Today reported. That's almost a third of the assets of the fund, which is run for Cargill's outside clients.
Since the managers overseeing this fund's money also run about $1 billion of Cargill's own assets, the firm's overall losses in these derivative securities could well run a lot higher.
In a brief alert to clients, Mari Kooi, president of Cargill Asset Management, said the Minnetonka Fund fell 32 percent in March.
Derivatives are such products as futures and options contracts. They permit investors to trade the underlying securities - such as stocks and bonds - with much greater leverage or borrowing power than would normally be the case.
The Minnetonka Fund is understood to have taken a beating in derivatives of mortgage-backed securities. That's what led to the recent collapse of Askin Capital Management, another big player in these securities.