March Madness Trips Up Clarium LP
Global Macro funds were willing to ride a few one way trades to start the year, and it paid off in spades.
Peter Thiel’s Clarium LP gained 24% in January, and tacked on more in February, but could not dodge the Ides of March. The third week of the month had to be brutal, as we noted on March 20th:
Trend followers have been pushing commodities relentlessly higher, but their one way ramp has been rudely interrupted.
The most crowded trade of them all, gold, had its worst week in 18 years and quickly wiped out a month of gains. Global Macro hedge funds were on the wrong side of nearly everything this week, with stocks up, gold and oil down, and the dollar rallying. 1440 Wall Street
Indeed. Clarium gave back some ground in the month of March:
Clarium Capital Management, a $3.8 billion hedge led by PayPal co-founder Peter Thiel, fell 9.9 percent in March on foreign stock investments, but is still up 15 percent for the year, the firm told investors in a note this week.
Clarium, a “global macro” fund that invests in commodities, currencies, fixed income and equities, posted an 8.5 percent decline in foreign equity, which worsened the month’s returns. It didn’t specify its foreign equity holdings in the letter obtained by Reuters.
Clarium’s March performance suggests that other macro funds may have fared poorly last month after two previous strong months. According to industry tracker Hedge Fund Research, global macro funds on average gained 13 percent in the first two months of 2008. March numbers haven’t come in yet for many funds.
HFR said much of the “outstanding” gains in January and February were due to short positions in the U.S. dollar against foreign currencies, and long both sovereign debt and commodities. HFR tracks more than 11,000 hedge funds and funds that invest in hedge funds, known as funds of funds. Reuters
Clarium’s investors will have to take the bad with the good; Clarium is faring much better than the vast majority of the investment community year to date. No worries, the money is going to tumble into Thiel’s coffers by the end of the year, and I am willing to hazard a guess as to his AUM by year end..
$8.3 billion
Will that prove to be conservative?
Hedge fund Clarium takes 9.9 pct hit in March
Reuters
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