Hedge Fund Superstars Can’t Master Yield Curves

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First, Bloomberg News revealed in early August that Alphadyne Asset Management, which has never had a down year since starting in 2006, was facing losses of about $1.5 billion through the first seven months of 2021 after being caught in wrong-way bets on rising interest rates. Element Capital Management, the $15 billion firm considered with Alphadyne to be among the best in the world at trading rates, tumbled 7% in February as global bond yields jumped and curves steepened. Element, led by its billionaire founder Jeffrey Talpins, began mounting a comeback more recently by simply avoiding wagers on interest rates.

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