Discovery Fund Extends 2014 Loss on Emerging Markets

Discovery Capital Management LLC, the $15 billion macroeconomic hedge-fund firm run by Robert Citrone, slumped in April to bring its losses this year to 12 percent, according to an e-mail the firm sent to investors.

Class A1 shares of Discovery Global Opportunity Fund Ltd. fell about 4.9 percent this month through April 17, according to the e-mail, a copy of which was obtained by Bloomberg News.

Citrone started South Norwalk, Connecticut-based Discovery in 1999 and last year returned 28 percent in its main fund, according to an investor report. The firm has struggled in 2014 after predicting at the start of the year that a crisis in emerging markets would worsen and shares of technology companies would rise, according to a letter to clients, a copy of which was obtained by Bloomberg News.

Patrick Clifford, a spokesman for Discovery at Abernathy MacGregor Group Inc., declined to comment on the e-mail.

Macro funds such as Discovery, which seek to profit from broad economic events by trading everything from bonds to commodities, posted the worst first-quarter performance since 2009 after falling 0.2 percent, according to data compiled by Bloomberg. Emerging Sovereign Group LLC, the $5 billion hedge-fund firm owned by Carlyle Group LP, lost about 6 percent this year through April 11 in its ESG Credit Macro Event Master Fund.

Hedge funds that invested heavily in technology shares in the first three months of 2014 also took a beating as popular holdings such as Chinese Internet company Baidu Inc. fell 14 percent and online retailer Inc. tumbled 16 percent. Greenlight Capital Inc., the $10.3 billion hedge-fund firm run by David Einhorn, has been betting against a group of technology stocks as evidence of a bubble grows, it said in a quarterly letter to clients. Greenlight said its funds lost 1.5 percent in the first quarter.

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