Photographer: Sanjit Das/Bloomberg

Lipschutz’s Hathersage Earns 41% in Currency Strategy for 2016

  • FX hedge funds have earned 1.2% on average this year
  • USD outlook ‘unambigiously positive,’ CIO says in letter

Hathersage Capital Management LLC, a $650 million hedge fund specializing in foreign exchange, has posted a 41 percent return in one of its main strategies this year.

The Hathersage G10 Macro Access Strategy is the best performer this year through Dec. 16 among a group of 26 currency-focused hedge funds tracked by Citigroup. Its ascent coincides with a surge in the dollar since Donald Trump’s election victory. The greenback has strengthened on speculation the president-elect’s policies will stoke economic growth and inflation, prompting the Federal Reserve to keep raising interest rates. Another Hathersage strategy, G10 Daily Access, has risen about 11 percent in 2016.

“The next leg higher in the U.S. dollar has begun,” Bill Lipschutz, Hathersage’s founder and chief investment officer, wrote in a letter to investors obtained by Bloomberg. “As is usual in the currency markets, re-pricings are rapid and they are large. The new administration’s promised mix of massive infrastructure spending, corporate tax reduction and relaxation of regulation has provided the fuel to take the USD up.”

Fiscal stimulus, stronger economic growth and inflation are “unambiguously positive” for the greenback, Lipschutz said in the letter.

Currency-focused hedge funds have returned 1.2 percent on average this year through November, according to a Hedge Fund Research index, on pace for the best year since 2010.

A spokesman for Hathersage declined to comment.

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