Popular Funds Disappoint

Lackluster as 2012 was for hedge funds as a whole, it was worse for global macro managers, among them multi-billion-dollar firms known for their success in difficult markets and popular with fund of funds and consultants.

Two of the best known, Comac and Caxton, coasted or lost money through much of the By contrast, these performed exceptionally well in the financial crisis.

London-based Comac made around 30% in 2008 even as hedge funds as a whole lost about 19% and markets went down much more. year.  Founder Colm O’Shea at one time worked for George Soros.

Caxton, a double-digit earner in the crisis, lost heavily in 2009 and has been lackluster since. In 2011 founders Bruce Kovner and Peter D’Angel announced their retirement. 2012 was another disappointment.

People used to think of global macro managers as great long-term bets across business cycles, because they can nimbly move between markets. Indeed, Caxton compiled an impressive track record over the decades and became a favorite of many veteran investors.

But last year global macro was one of the worst performers, returning 2.7% compared to 8.3% by all strategies according to BarclayHedge. The conventional wisdom now is that markets have changed and are more crowded—with managers throwing in the towel and retiring.

But global macro has its advocates, who say we are just going through a passing phase   and the investments still make sense.

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