BLUECREST Capital Management alumnus Mohit Khurana's macro hedge fund returned an estimated 15 per cent in the first half with winning bets on rising interest rates and diverging economic policies around the globe, said a person with knowledge of the matter.
Southern Ridges Macro Fund gained 3.3 per cent in June alone, said the person, who asked not to be identified as the information is private. Southern Ridges Capital, which oversees US$1.2 billion with 27 portfolio managers in Singapore and New York, declined to comment in an e-mail.
In a year when stock-focused hedge funds are struggling with volatile markets, macro hedge funds that had been stymied for years by monetary easing are roaring back. A Bloomberg gauge of macro hedge funds worldwide rose 5.3 per cent in the first 5 months of this year, against a 4.2 per cent decline for funds of all strategies. The S&P 500 index meantime has plunged 20 per cent this year.
Macro traders including Crispin Odey at Odey Asset Management in London and Said Haidar at his namesake firm in New York made exceptional gains while firms including Balyasny Asset Management and Schonfeld Strategic Advisors have added to teams in this space. Bridgewater Associates posted a 32 per cent return for its flagship hedge fund through the first half of 2022. Macro hedge funds trade across markets including stocks, bonds, currencies and commodities, seeking to profit from broad economic trends.
In rates trading, Southern Ridges's fund profited from tighter financial conditions that have sent rates rising globally, the person added. It also gained from the varied paces at which central banks have been phasing out easy monetary polices.
In the currency space, it focused on policy divergence among central banks in the US, Japan, China and Hong Kong. More profitable trading opportunities arose from countries including Singapore using foreign exchange policies to contain inflationary pressure, and as tighter financial conditions and slower growth weighed on emerging markets currencies.
The latest gain for Singapore-based Southern Ridges boosted the annualised return since the fund's January 2019 inception to 8.5 per cent, said the person. From the end of December 2018 to May 31 this year, the Bloomberg Macro Hedge Fund Index had an annualised gain of 7.4 per cent.
While some macro hedge fund performances can be choppy because of concentrated directional bets, Southern Ridges Macro Fund's biggest continuous decline was just 1.7 per cent between June and July 2021.
Southern Ridges in March reopened its flagship fund to fresh money for the first time since December 2020, said the person. It also plans to start a second fund, Southern Ridges Summit Macro Fund, which employs the same strategy but targets investors who can stomach 2 to 3 times the risk of its existing fund for higher potential returns.
Khurana, 43, started Southern Ridges with about US$800 million after spending 6 years at BlueCrest, the London-based firm run by billionaire Michael Platt. BLOOMBERG