Christian Siva-Jothy, Goldman Sachs Group Inc.’s former co-head of proprietary currency trading, is shutting down his hedge fund after delivering “poor performance” since 2008, according to a letter sent to clients.
Siva-Jothy, who plans to return money to investors, liquidated all of London-based SemperMacro Fund’s positions this month except one option trade, according to the letter, which was reviewed by Bloomberg News. The fund is down 2.3 percent for the year after losing 8.7 percent in 2010 and 27 percent in 2009, according to the letter.
“In this business you are only as good as your last few trades,” Siva-Jothy wrote. “Mine have not been very good. Whether I have lost my edge or simply need a break after 23 years I am not sure, but I certainly hope it is the latter.”
Siva-Jothy, who started SemperMacro after leaving Goldman Sachs in 2004, said in the letter that he misjudged financial data and the impact that moves by the U.S. Federal Reserve to spur the economy would have on global markets. The fund, which bets on currencies and equity markets, managed almost $200 million when Siva-Jothy decided to close the fund, said Stefan Pollmann, a partner at the firm.
Siva-Jothy didn’t immediately return a phone call seeking comment.
His track record making profitable trades for New York-based Goldman Sachs enabled him to raise as much as $1.5 billion at SemperMacro, before a 16 percent loss in 2006 led to client withdrawals.
Macro funds rose an average of 1.6 percent in January after gaining 2.2 percent last year and 13 percent in 2009, according to data compiled by Bloomberg.
“After considerable deliberation over the last few months, combined with poor performance, I feel I have little choice but to return assets to you,” Siva-Jothy wrote to clients.
The Fed cut its benchmark interest rate to near zero in December 2008 and bought $1.7 trillion of mortgage debt and Treasuries through last March as it sought to pull the U.S. out of the worst recession since the 1930s. On Nov. 3, the Federal Open Market Committee decided to buy $600 billion of Treasuries through June, the second round of a policy measure known as quantitative easing.
The Fed’s initial moves followed a credit crisis that triggered the demise of Lehman Brothers Holdings Inc. and prompted the U.S. bailout of insurer American International Group Inc. SemperMacro gained 51 percent in 2008, according to the client letter, when hedge funds on average posted their worst year on record.
“I continue to believe another crisis lies ahead, most likely of greater magnitude than we have seen,” Siva-Jothy wrote in the letter.
SemperMacro until 2007 was affiliated with Fulcrum Asset Management LLP, a U.K. hedge fund founded by former Goldman Sachs Chief Economist Gavyn Davies.
Goldman Sachs is disbanding its proprietary trading group after Congress approved legislation last year that restricts banks from risking their own capital on speculative bets.