Tue, Jan 17, 2017
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. Southpoint Capital gains 3.8% in Q3, bringing year-to-date returns to 5.2%[more]

    From Valuewalk.com: Southpoint Capital Advisors, the $3 billion New York hedge fund founded by former employees of David Einhorn’s Greenlight Capital, added 3.8% net during the third quarter of 2016, bringing year-to-date returns to 5.2% and cumulative returns since inception (July 2004) of 237.4% a

  2. The Big Picture: The case for emerging market debt in 2017[more]

    Benedicte Gravrand, Opalesque Geneva: Emerging market (EM) assets outperformed in 2016 mainly because of stronger fundamentals and an improving international environment, with GDP picking up speed, leading to positive earnings revisions for the first time in five years,

  3. Hedge funds gain across strategies in December, outperform MSCI to close at record index level in 2016[more]

    Komfie Manalo, Opalesque Asia: Hedge funds posted gains across all strategies in December to conclude 2016, with the HFRI Fund Weighted Composite Index (FWC) rising to a record index value level as oil prices surged, equities gained and U.S. interest rates increased into year end, accordin

  4. Performance - BlackRock's robot stock-pickers post record losses, Soros-backed fund Glen Point loses in first trading year, Regal Funds Management: Bleak year as returns in key funds plunge 25pc, Elm Ridge Capital up 25% in 2016[more]

    BlackRock's robot stock-pickers post record losses From Bloomberg.com: Like so many fund titans these days, Laurence D. Fink is betting on machines to turn around BlackRock Inc.'s beleaguered stock-picking business. Trouble is, they just might have made things worse. BlackRock

  5. Eurekahedge Hedge Fund Index up 1.01% in December (+4.48% YTD)[more]

    Hedge funds gained 1.01% during the month of December, with 2016 returns coming in at 4.48%. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 2.38% in December with its 2016 returns coming in at 7.37%. North American equity markets traded higher in December as t