(Repeats story from Sunday, adds graphic link)
* Trump policies seen boosting macro strategy returns
* Macro strategy most in demand for 2017 -Credit Suisse
* Rokos, Stone Milliner, Gemsstock, EDL Capital assets climb
* For graphic click on: reut.rs/2nxD7bN
By Maiya Keidan, Svea Herbst-Bayliss and Lawrence Delevingne
LONDON/BOSTON, April 9 "Macro" hedge funds are
back in favour with investors seeking to take a view on U.S.
President Donald Trump's economic policies, European elections,
or interest rates, but it is start-up funds rather than
established players which are attracting cash.
Some of the main beneficiaries of the macro revival are
managers who cut their teeth at the big macro firms such as
Moore Capital Management, Brevan Howard and Tudor Investment
Corp, which made their names for outperformance in 2007-2009.
Eric Siegel, head of hedge funds at Citi Private Bank,
said in general that macro strategies are likely to thrive.
“With volatility coming back and monetary supply tightening, we
believe it could be a great environment for macro managers,”
Macro funds bet on macroecnomic trends using currencies,
bonds, rates and stock futures. They outperformed the broader
industry during the financial crisis and amassed tens of
billions of dollars between 2010 and 2012. But they lost most of
those assets between 2013 and 2014 and also in 2016 for a
variety of reasons, including performance.
But macro is back in vogue and was the most popular hedge
fund strategy among investors in the fourth quarter of 2016 and
the first two months of this year, according to industry data
providers Preqin and eVestment.
Moore Capital's Louis Moore Bacon, Alan Howard, who
co-founded Brevan Howard, and Paul Tudor Jones of Tudor
Investment were among the macro stars after years of delivering
But during the lean years, when macro was less in favour,
they had to cut fees and in some cases staff.
Now newcomers, such as Moore Capital spin-out Stone
Milliner, are pulling in cash and producing some strong returns.
Stone Milliner's discretionary global macro closed to new
money last year after taking in over $4 billion in the previous
Moore Capital's assets have fallen slightly from $15 billion
in 2012 to $13.3 billion as of Dec. 31 2016, filings with the
U.S. Securities and Exchange Commission (SEC) showed.
Anglo-Swiss firm Stone Milliner, set up in 2012 by former
Moore Capital portfolio managers Jens-Peter Stein and Kornelius
Klobucar, averaged returns of 8.3 percent between 2014 and 2016,
a source told Reuters, while Moore Capital Management averaged
3.4 percent, a second source said.
London-based Gemsstock, set up in January 2014 by Moore
Capital trader Darren Read and his co-founder Al Breach, made
12.8 percent on average over the same period, documents seen by
Chris Rokos, a Brevan Howard alumnus, raised another $2
billion in February after returns of 20 percent in 2016.
EDL Capital made gains of 18.4 percent last year after
ex-Moore Capital trader Edouard De Langlade launched the firm in
September 2015, according to a source close to EDL Capital. It
has amassed assets of $450 million to date, he said.
Ben Melkman, who also formerly worked at Brevan Howard until
May 2016, raised over $400 million for his launch in March, SEC
Brevan Howard's firm-wide assets fell to $14.6 billion in
2017, from $37 billion in 2012. [here
RUSH FOR MACRO
But the old guard are fighting back. Some have been cutting
fees and offering alternatives.
Howard, Brevan Howard's co-founder, last month launched a
new fund managed solely by him, which sources said has already
amassed more than $3 billion.
Tudor Investment lowered its management fees to 1.75 percent
and performance fees to 20 percent in February after a reduction
last year and Moore Capital cut the management fee on its Moore
Macro Managers fund to 2.5 percent from 3 percent.
Tudor Jones laid off 15 percent of staff in August. The
firm's main Tudor BVI Global Fund started 2017 down 0.6 percent
to March 3 after gaining 0.9 percent in 2016.
Brevan cut its management fees to zero for some current
investors in its Master Fund and its Multi-Strategy fund last
September after a similar move from Caxton Associates.
But for both the old and new macro funds, it is still to be
determined what 2017 will hold.
Even though macro funds are flat on average for the first
two months of 2017, making gains of just 0.38 percent, according
to Hedge Fund Research, the popularity of macro strategies is
not in doubt.
A Credit Suisse survey in March of more than 320
institutional investors with $1.3 trillion in hedge funds showed
macro was set to be the favourite strategy of 2017.
Preqin data showed that after pulling assets out of macro
for three back-to-back quarters, investors added $6.4 billion to
the strategy in the fourth quarter of 2016 after Trump's win.
eVestment data showed that macro funds have pulled in $4.4
billion in the first two months of 2017, demonstrating a
turnaround from 2016 when investors took $9.8 billion out of
macro after withdrawing $10 billion in 2013 and $19.1 billion in
"I don't think macro is dead. Managers who can be nimble and
are able to look outside the large liquid asset classes can
still find great opportunities," Erin Browne, head of Global
Macro Investments at UBS O’Connor, said.
Representatives at Tudor did not immediately respond to a
request to comment. Moore Capital had no comment. A spokesman at
Brevan declined to comment.
(Editing by Jane Merriman)