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February 06, 2007

Bye Bye Hedge Fund Bubble

posted by MR WAVETHEORY at 2/06/2007 08:05:00 AM
Semper Macro is the latest fund the hit the wall.

Macro Fund Cutting Fee, Staff, After '06 Woe
London hedge fund SemperMacro is reducing its performance fee as well as cutting staff in the wake of a poor 2006.

The Wall Street Journal said SemperMaco lost 16% last year. The newspaper went on to report the hedge fund is seeing a lot of outflow.

The underperformance at SemperMacro, a unit of Fulcrum Asset Management, underscored the volatility inherent to global macro strategy, the report surmised.

SemperMacro lost big on the U.S. dollar and Japanese equity last year. When its 18-month lockup expired in December, the hedge fund saw its asset size shrink from $1.5 billion to $500 million in an investor exodus.

The hedge fund is cutting staff, mostly trading personnel, the newspaper said. The number of staff being let go at SemperMacro could not be determined.

In addition, SemperMacro is bringing its performance fee down from 20% to 15%.

Over the past year, the Vega Select hedge fund and Wadhawani Asset Management have also been victimized by the volatile macro space.

SemperMacro was set in 2004 by former Goldman Sachs trader Christian Siva-Jothy and economist Gavyn Davies.

The culprit: misplaced currency bets and international equity investments. Semper apparently means "Always" as in Semper Fi (Always Faithful). Therefore Semper Macro means "Always Macro."

Sometimes it may help not to be too macro.

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