Warren Naphtal’s $4.2 billion currency fund gained 15.4 percent in the first quarter after wagering on a strong U.S. dollar versus the euro, according to two people with knowledge of the matter.
Naphtal, a former head derivatives trader at Putnam Investments, returned 8.2 percent in March, said the people, who asked not to be named because the information is private.
P/E Investments, which relies on computer models to predict currency trends, has seen a series of gains driven by a strengthening U.S. dollar, which has rallied about 16 percent since last April. The Boston-based firm’s currency fund gained 31 percent last year, the best return since it started in 2003. This followed two years of losing 7 percent each.
Naphtal started the the firm in 1995 with his wife, Mary Stephens, previously of McKinsey & Co., who is chief operating officer. Co-founder Richard Zecher, the former president and chief executive officer of UBS Asset Management, is P/E’s strategist.
Christin Luttrell, a spokeswoman for the fund, declined to comment on returns.
Currencies have been a source of major profits and losses in 2015 as central banks have taken surprise actions to help economic growth. Bridgewater Associates, the world’s largest hedge fund, climbed about 14 percent this year through March in one of its main strategies helped by a bet against the euro.
Two Sigma, a $24 billion investment firm that uses computer models to bet on markets, lost 8.4 percent in January in its Compass fund and 16.8 percent in a leveraged version of the strategy, partly because of wrong-way currency bets. The firm has since recouped some of the losses, ending the quarter down 4.5 percent in the Compass fund and about 9.9 percent in the Compass Enhanced, said two people with knowledge of the matter, who asked not to be named because the information is private.
Perrin Wheeler, a spokeswoman for New York-based Two Sigma, declined to comment.