Greg Coffey, the Australian hedge fund star once nicknamed the “Wizard of Oz”, has emerged as one of the big winners in this month’s markets sell-off, according to three people familiar with the situation. Kirkoswald Capital, the firm Coffey started in 2018 after coming out of retirement and which now manages about $8bn, has made hundreds of millions of dollars in the recent market turmoil, two of the people said.
At big multi-manager hedge funds, which employ dozens of teams trading different asset classes, portfolio managers hit up against limits designed to mitigate losses and were forced to close out positions. As the Japanese currency strengthened and stocks sold off, other investors also had to unwind the popular “carry trade” where they borrowed money in yen and invested it in higher-yielding assets.