Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.

Macro hedge funds toast to explosive year peers want to forget

Hedge funds that trade bonds and currencies are on track for their best year since the global financial crisis, boosted by a sharp rise in interest rates that has led to heavy losses for equity pundits and mainstream investors. increase.

so-called macro Hedge fundMade famous by the likes of George Soros and Louis Bacon, the dollar is rising as the US Federal Reserve and other central banks battle skyrocketing inflation.

Among the winners is billionaire trader Chris Rokos, who has recovered from last year’s losses to make a profit of 45.5% in 2022. Including UK market turmoil in autumnThe co-founder of Brevan Howard is having his best year since launching his own fund in 2015. With assets of around $15.5 billion in 2015, it is now the largest macro fund in the world. is one of

By mid-December, Caxton Associates chief executive Andrew Law had made a 30.2% return on his $4.3 billion macro fund, according to investors. Haidar’s New York-based Haidar Capital has acquired 194% of him in the Jupiter fund. This was underpinned by betting on bonds and commodities, which were up more than 270% at one stage this year.

Kenneth Tropin, chairman of Graham Capital, which was founded in 1994 and has $19 billion in assets, said the boom in macro traders “reminds me of my early career when macro funds were the dominant style of investing.” said. 1980s, 1990s, early 2000s.

“They were true hedge funds that deliberately did not correlate with people’s underlying exposures in stocks and bonds,” added Tropan.

Global equities have fallen 20% this year, bonds have posted their biggest drop in decades, and 2022 will see year to forget to most asset managers. But hedge funds that can bet on bonds and treat currencies as an asset class have made great strides. Macro funds have risen an average of 8.2% in the first 11 months of the year, according to data group HFR. This gave him the best year since 2007, when the global financial crisis began.

Traders benefited from higher yield bets, with yields jumping from 0.7% to 4.3% on US 2-year bonds and 10-year bonds rising from 1% to 3.6%. Surprise changes to yield curve control policy by the Bank of Japan sent Japanese government bond yields soaring. Further improvement of return.

“They gave all macro traders a nice Christmas. I think even the office security guards are shorting Japanese government bonds,” quipped one macro hedge fund manager.

Now that the “artificial restraint on volatility” from ultra-accommodative monetary policy is now gone, macro traders are likely to benefit from economic research, said Darren, global head of investment and alternatives at Abdoun. Mr Wolf said.

Computer-driven hedge funds have also benefited, with many market movements providing long-term trends. These so-called managed futures funds are up his 12.6%, their best year since 2008.

London-based Aspect Capital, which manages about $10 billion in assets, made a 39.7% return on its flagship diversified fund. He made profits in markets such as bonds, energy and commodities, with his biggest wins being bets on British gold coins. Reda Braga’s Systematica won his 27% stake in the BlueTrend fund.

said Andrew Beer, managing member of US investment firm Dynamic Beta. Soaring yields and fast-moving currencies have created an opportunity for trend-following funds, he added.

The rally contrasts with the performance of equity hedge funds, many of which have endured a miserable year as high-growth but unprofitable tech stocks that rose in the bull market plummeted as interest rates rose.

Chase Coleman’s Tiger Global was one of the biggest winners in tech stocks that surged amid the coronavirus pandemic, dropping 54% this year. Andreas Halvorsen’s Viking, which exited the stock, was down 3.3% by mid-December.

Meanwhile, Boston-based tech-focused fund Whale Rock fell 42.7%. Sky Global, founded by former Thirdpoint analyst Jamie Stern, also fell 40.9% as stocks such as Amazon, Microsoft and Alphabet fell. In a letter to investors seen by the Financial Times, Stern wrote that he was wrong about “the seriousness of macro risk.”

Equity funds overall are down 9.7%, heading for their worst year since the 2008 financial crisis, according to HFR.

“Our biggest disappointment is that even well-established managers with long-term track records have not seen rising interest rates impact growth stocks,” said Cedric Vignet, head of liquid alternatives managed funds and research at SYZ Capital. “I couldn’t predict the impact it would have,” he said. “They didn’t recognize the paradigm shift and buried their heads in the sand.”

Except for 2020, this year saw the largest gap between the top 10 and bottom 10 hedge fund performers since the aftermath of the 2009 financial crisis, according to the HFR.

“Over the past decade, people have been rewarded for investing in hedge fund strategies. [market returns]said Tropin of Graham Capital. But 2022 was a year of reminders that ideally hedge funds should also offer diversity. “

Additional reporting by Katie Martin


https://www.ft.com/content/adeba089-4ee7-4a08-bc6e-a56e4dedbbbf Macro hedge funds toast to explosive year peers want to forget

Back to top button