Perkins, a protege of billionaire energy trader John Arnold, launched Skylar Capital Management in Houston in October to trade U.S. gas futures, options and swaps, and has raised at least $102.4 million, according to a securities filing that month. Skylar is still raising money from investors and plans to close in about six months, he said, though he would not disclose the total amount of assets under management.

By way of comparison, Taylor Woods Capital Management, the commodity hedge fund founded by former Credit Suisse natural gas trader George "Beau" Taylor, started with at least $150 million in January 2011 and grew to $1.3 billion in March 2012.

The 43-year-old New Jersey native, who has been trading gas since the late '90s, believes investors who focus only on low gas prices are missing out on profits from volatility.

"People tend to look at things in absolute terms and say, 'Oh it's not going to go to $10,' but as a percentage move, the moves (today) are fantastic. The potential is under appreciated," Perkins said in his first interview since the fund's launch.

Natural gas futures prices did not rise above $4 per million British thermal units in 2012.

Overzealous drilling has resulted in a multi-year gas glut, finally sending prices to a 10-year low last spring. Yet despite the negative headlines, natural gas has surprised many commodity market watchers by rising on gas-fired electricity demand.

July 2012 was the hottest month on record in the lower 48 United States, U.S. government data showed, and power demand for air conditioning spiked. Prices followed in kind, rising some 61 percent, from under $2 mmBtu in April to above $3 mmBtu in July.

The fuel was the third best-performing commodity in the Reuters Jefferies CRB Index with a 12 percent gain last year.

Many investors missed out on the rally. The average energy hedge fund tracked by HedgeFund.net, a database run by New York's eVestment Alliance, was down 3.4 percent for 2012.

Arnold, the former star Enron trader and founder of Centaurus, shut his fund in May citing, in part, low natural gas prices.

Perkins says the broader market often fails to grasp the critical bits of information that can lead to a winning trade.

"For example, when gas was trading at $2, the marginal piece of information was not the storage overhang, (but that) gas burns as a percentage of total power load were going up and were at levels never seen before," he said.

FROM NYMEX CLERK UP

Perkins started his energy trading career as a clerk on the floor of the New York Mercantile Exchange after graduating from the University of Iowa with a bachelor's degree in electrical engineering.

He was then recruited by El Paso Energy in Houston to run a natural gas options desk and later traded energy derivatives for AIG and Statoil.

Perkins joined Centaurus when Arnold founded the fund in 2002, using his final bonus from Enron as start-up capital. It did remarkably well, making Arnold a billionaire and showering fortunes on its traders.

Perkins says he learned from Arnold not to allow his emotions to cloud his trading, to constantly question his views and to make use of reams of fundamental market research and data.

"The thing I took away from John is that the level of fundamental research and data it takes to get it right is substantial. You have to constantly dig."

Skylar employs another trader besides Perkins, as well as three researchers, along with back office and technology personnel. The fund also has an offsite research team. It does not engage in high frequency or algorithmic trading.

Still, when the $2 billion Centaurus shut its doors it left a notable and gaping capital hole in the niche-size natural gas market. But now that banks are scaling back proprietary trading to conform to new government regulations, a market hit hard by low prices has been slammed again.

Société Générale exited the power and natural gas business at the end of 2011.

In November 2012, Stamford, Connecticut-based merchant energy firm Freepoint Commodities laid off staff in its natural gas group citing structurally low natural gas prices.

"It is difficult, but it creates a lot of opportunity. Centaurus provided a lot of liquidity. There is a need and a role for independent fundamental traders, a hedge fund to fill those shoes," Perkins said.

(Editing by Leslie Gevirtz)

By Jeanine Prezioso