June 16, 2024
Funds

Hedge fund Caxton suffers in choppy year for bond markets


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Caxton Associates, one of the oldest and best-known global macro hedge fund managers, lost money in its two main funds in 2023, say two people who have seen the numbers, in a turbulent year for bond markets.

The London-based firm, headed by Andrew Law, lost 9.2 per cent in its Caxton Macro fund, while its flagship Caxton Global Investments fund lost about 1 per cent. The macro fund takes more concentrated bets than the flagship.

Caxton did not immediately respond to a request for comment.

The macro fund was down as much as about 20 per cent last year, following losses in the first half of the year, but made back some ground in the remainder of 2023, investors said.

“At the start of the year there was so much volatility in rates the fund got whipped around,” said a person close to the firm.

Caxton was founded in 1983 by Bruce Kovner. Global macro funds trade moves in bonds, currencies, commodities and equities on the back of economic trends.

The performance figures punctuate a challenging year for macro hedge funds. After a sharp sell-off in debt markets at the start of the year, as central banks raised interest rates to fight inflation, bond prices rocketed as the collapse of Silicon Valley Bank sparked a flight to safety, taking many hedge funds by surprise.

Caxton’s losses last year mark a change in fortunes after strong gains in 2022, when the macro fund was up roughly 35 per cent. 

Brevan Howard, another prominent global macro manager, also had a tough year in 2023. Its flagship fund was down 2.1 per cent while its Alpha Strategies fund was up 2.4 per cent, according to people who have seen the figures. 

However, Rokos Capital Management, run by former Brevan Howard co-founder Chris Rokos, ended 2023 up 8.8 per cent. BlueCrest Capital, the family office of billionaire trader Mike Platt, gained 20.3 per cent last year, according to people familiar with the performance.



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