Castleton tracks its origins to 1997 when Louis Dreyfus Commodities, a 164-year-old agricultural trader, decided to expand into U.S. energy. Dreyfus then sold a 47 percent stake in that business to Highbridge Capital Management, the hedge fund founded by Dubin and later acquired by JPMorgan.
In 2012, both the bank and the trading house wanted to leave the business, and Dubin arranged the buyout.
Energy Expansion
The original business was focused on the U.S. natural gas and power industries. Since then, the company has expanded into North American oil and, with the Morgan Stanley deal, added global crude and refined products trading.
Acquiring an oil business that last year had 40 tankers on the water most days means the company will “jump scale in terms of diversity, physical trading capabilities and capitalization,” Castleton said in its June presentation.
“This is a very interesting new player that could become one of the new contenders for the top of the league,” said Roland Rechtsteiner, a Zurich-based partner at Oliver Wyman who specializes in advising commodity-trading businesses.