SemperMacro Fund Posted a Strong Gain in September
This is a tough time for many hedge fund managers, but not Christian Siva-Jothy.
Siva-Jothy's $440 million dollar SemperMacro fund posted an eye-popping 12.3% return in September, according to the Financial Times. In a letter to investors, Siva-Jothy wrote that the fund made money from a correct prediction on the direction of US interest rates, a bet against the British pound and a broad short position in dropping equity markets. The fund, which gained a total of 17.4% last year, is currently up 3.5% in 2008. Considering the overall drubbing that the equity markets have taken in 2008, this is a fantastic return.
Siva-Jothy also wrote to his investors that he expects US interest rates to continue to drop, and that he has positioned the fund's assets to take advantage of this expected drop.
Christian Siva-Jothy was the former Head of Proprietary Trading at Goldman Sachs before he left to start his own hedge fund. He is probably best-known for his incredibly profitable trades in the immediate aftermath of the 9/11 attack. While other traders stood and watched the events transpire with their mouths agape, Siva-Jothy sprung into action, correctly deducing that the first airliner crash was in fact a terrorist act. Siva-Jothy credits his many years in the air as a helicopter pilot as the reason why he was able to act so fast. He had this to say about the incident at the time:
"I immediately thought, terrorist act. I figured this was going to whack consumer sentiment. I bought Eurodollars."
Siva-Jothy split from his partner Gavyn Davies in 2007 after the SemperMacro fund turned in a poor year. Mr. Davies runs the Fulcrum Asset Management firm, and elected to sever ties with Siva-Jothy and his SemperMacro fund after several embarrassingly wrong currency trades affected fund performance and cast a shadow over both men's reputations. Siva-Jothy has since managed to turn things around though, as many expected that he would do. Siva-Jothy was incredibly successful during his time at Goldman Sachs, and expects to really hit his stride during these increasingly volatile times.
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