Counterpoint Fund Gains as Swiss Luxury Goods Maker Put Pays OffBei Hu
The Swiss National Bank provided a boon for the $163 million Counterpoint Asian Macro Fund this month when it ended a currency cap.
The fund held a put option, or protection against share-price declines, allowing it to sell a certain amount of shares in a Swiss luxury-goods maker by a specific date, Geoffrey Barker, who manages the fund with City Financial Investment Company (Hong Kong), said in an e-mailed response to a Bloomberg query.
The SNB’s surprise decision to scrap the cap on the franc versus the euro on Jan. 15 sent the Swiss currency surging as much as 41 percent and shares of exporters tumbling on the view that the country’s exports will become more expensive and less competitive. Counterpoint made money in a month when peers including BlueCrest Capital Management, Comac Capital and Everest Capital suffered losses tied to the SNB move. Everest Capital decided to shut its largest hedge fund after losing virtually all its money.
The Counterpoint fund also profited this year from trades tied to copper prices declining and interest rates in India dropping, Barker said.
Its copper positions were based on China’s investment slowdown driving an oversupply and that the price was expensive after other commodities had fallen, Barker said. His team also anticipated a strong dollar, in which commodities are priced, to affect copper. The price of the metal fell to the lowest since 2009 this month.
In India, Barker’s team had forecast faster interest-rate cuts by the Reserve Bank of India as inflation dropped more than expected, helped by lower oil prices. The central bank cut rates in an unscheduled review to revive growth on Jan. 15.
The fund was “up comfortably” this year, based on an internal estimate, Barker said, declining to give specific numbers because of a policy of not sharing intra-month data.
The Counterpoint fund has returned almost 5 percent since inception in March, Barker said. Asian macro hedge funds on average were little changed between the end of February and December, according to an index compiled by Singapore-based Eurekahedge Pte.
A former HSBC Holdings Plc economist, Barker managed the BIA Pacific Macro Fund, whose assets peaked at about $400 million in 2009, for Hong Kong-based Ballingal Investment Advisors. It returned an annualized 10 percent between inception in March 2006 and when he left in 2013.