Sun, Mar 1, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Volatile currencies caused significant losses for larger hedge funds

Thursday, May 26, 2011
Opalesque Industry Update – Since the beginning of 2011, some of the largest hedge funds on a global scale have lost money from volatile currencies.

A report by The Wall Street Journal identified the hedge funds as the $2.5bn fund managed by Geraldine Sundstrom for Brevan Howard Asset Management LLP, an $8bn fund run by hedge-fund giant Tudor Investment Corp.; Caxton Associates' $5bn Global Investment Ltd. fund; and New York-based Moore Capital Management's $7.5bn Moore Global Investors fund.

Ron DiRusso, portfolio manager at the $8bn New York based currencies hedge fund FX Concepts told The Journal, "It's been a tough environment. The market goes in one direction for about three weeks, and everyone goes after it, and then it flips around. That's hurting people."

An independent study released by hedge fund data provider Hedge Fund Research showed that macroeconomics funds, which bets on currencies and global events, posted a negative 0.8% returns as at end May 19, 2010. For May, macro funds retreated 3.18%, HFR added.

The negative performance of currencies is a result of a decline in the global financial markets. But insiders are still unsure if the current debt problem in Europe and the perceived slow down in global economies will wipe off the gain in the past two years. Many believe that the uncertainties in the global economy are pushing currencies down. Data from HSBC also showed that Brevan Howard's Emerging Market Strategies Fund Ltd. declined 4.2% as of May 6, are posting a 2.7% negative growth as of Feb. 11. The Tudor B.V.I. Global Fund Ltd., managed by Paul Tudor Jones also fell 0.3% as of May 13 after registering a 1.9% rise on March 9.

Andrew E. Law’s Caxton Global Investment Ltd. fell 3% as of May 17 after registering a 0.5% loss on March 8.

Meanwhile, Moore Capital's flagship Moore Global Investments fund, run by Louis Bacon, was down 1.4% as of May 5, according to a source familiar with the fund. The firm's $3.8 billion Macro Managers Fund had lost 0.7% and one of Moore Capital portfolio manager Greg Coffey's funds deepened its losses from 4.1% on Feb. 28 to 5.8% as of May 5. The majority of foreign-exchange traded funds have been experiencing lows for the past several months as the Euro fell 6.5% against the U.S. dollar between May 4 and May 23. The rise of the Japanese yen by 4.6% immediately after the powerful Mach 11 earthquake and tsunami also spelled bad returns for the strategy.
- Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Seth Klarman of Baupost outlines his investment process as major stock market indices are stretched, Myriad hedge fund sold bulk of its Alibaba stake last year[more]

    Seth Klarman of Baupost outlines his investment process as major stock market indices are stretched From Valuewalk.com: As hedge fund manager Seth Klarman, leader of the $28 billion Baupost Group, reviews 2014 performance and considers investors gained near 7 percent on the year, he cons

  2. Adamas Asset Management and Ping An Insurance to co-manage $500m debt fund[more]

    Komfie Manalo, Opalesque Asia: Hong Kong-based Adamas Asset Management and Ping An Insurance Group, one of China’s largest financial institutions, have finalized a memorandum of und

  3. Opalesque Exclusive: dbSelect’s top ten FX strategies average almost 10% in January[more]

    Benedicte Gravrand, Opalesque Geneva: In one of Deutsche Asset & Wealth Management (AWM)’s hedge fund platforms, called dbSelect, a number of FX Strategies did very well in January. dbSelect is a managed investment platform for unf

  4. Opalesque Exclusive: SEC’s Mark J. Flannery warns hedge funds against valuation misconduct[more]

    Komfie Manalo, Opalesque Asia: Securities and Exchange Commission chief economist and director of Division of Economic and Risk Analysis (DERA) Mark J. Flannery has warned of the risks posed by market misconduct, particularly in the true valuation of assets by hedge fund managers. In his

  5. Dymon Asia's $3bn macro hedge fund lost 10.45% in January[more]

    From Reuters.com: Dymon Asia's $3.1 billion macro hedge fund lost 10.45 percent in January, performance data seen by Reuters showed, a month where many peers lost heavily after a surprise rise in the Swiss franc. Singapore-based Dymon, set up by Danny Yong, a former founding partner and chie