Element Soars 17.5% in 2018 as Turmoil Hedges Pay OffBy
Jeffrey Talpins’s macro hedge fund posted 4% gain during May
Macro traders broadly are struggling amid uncertainty in Italy
Jeffrey Talpins’s Element Capital Management made money last month, as markets were roiled by the political turmoil in Italy.
The $14 billion macro hedge fund rallied 4 percent in May, bringing returns for this year to 17.5 percent, according to a person with knowledge of the matter, who asked not to be identified because the information is private. The New York-based firm declined to comment.
Preliminary estimates by Eurekahedge show that macro traders, who bet on everything from the currencies to commodities, broadly lost money last month, as investors dumped assets on concern that Italy is headed toward new elections that could threaten the country’s membership in the euro. Element profited off of its hedges in interest rates and currencies that’d been designed to protect against rising stress and volatility in the euro area, the person said.
May’s performance is the latest bright spot for the firm, which Talpins started in 2005 after stints at Goldman Sachs Group Inc. and Citigroup Inc. Element, which has posted annualized returns of 21 percent since its inception, plans to accept $3 billion in fresh capital from July 1 to Aug. 1, said the person. The majority of the funds will be from existing investors.
Prospects that more interest-rate increases in the U.S., political risks and rising volatility will create trading opportunities for macro managers led to investors pouring nearly $12 billion into the strategy during the first four months of the year, according to data compiled by eVestment.