Sat, Dec 20, 2014
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 - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  5. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und