Hedge funds that bet on bonds, currencies, stocks and commodities are among the industry’s biggest winners this year easily outpacing growth and tech funds’ returns and preparing to see significant inflows of capital as the stock market hovers near bear market territory.
Now with inflation surging and volatility ticking higher as central banks reverse years of monetary stimulus, the environment looks to be especially good for global macro funds. Through the first quarter, the latest available data, flows were picking up as investors sent $3 billion in new capital into these strategies, compared with $1.9 billion going into equity oriented funds. Overall $19.8 billion was added in the first quarter, HFR data show.
This is opening the way for a “large pipeline of vast opportunities,” Bessent said, adding that events with a small probability of occurring are “becoming more numerous” as central banks are reversing ultra-loose monetary policies.Individual funds’ returns are making the case, with blue chip Brevan Howard Master Fund fund up 12.04% this year through April while the tiny Trium Larissa Global Macro fund is up 30.9% in the first four months of 2022.
To position themselves to take advantage of the shift in tastes and capital, some firms are adding strategies. Cinctive Capital Management hired former Brevan Howard trader Giles Coppel this year to build out a team as clients were asking for it. Earlier in the year Schonfeld Strategic Advisors earmarked $5 billion to the strategy.
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