The hedge fund management firm of billionaire trader Chris Rokos fell in its latest financial results after the fund suffered a heavy sell-off in government bonds, although traders have been able to profit handsomely from the surge in inflation.
Rokos Capital Management, one of the world’s largest macro hedge fund firms with client assets of around $15.5bn, posted a loss before member remuneration of £3.6m in the 12 months to March 2022, according to a filing with Companies House. That compares with profits of £914m for the previous year.
The latest results cover a very difficult period for media-shy traders, who became one of the top victims of hedge funds due to violent selling in short bonds in the fall of 2021. The results at the beginning of the coronavirus pandemic, ended the calendar year 2021 down about 26 percent.
However, it has started to recover, profits from betting on interest rate hikes last year, including during the turmoil of the UK market in the autumn. The fund ended last year up about 51 percent, with just one month of losses, its strongest calendar year since launching in 2015.
Only a small part of the fund’s income in 2022 is covered by the latest financial results of the management company.
Rokos Capital did not immediately respond to a request for comment.
The company’s revenue, driven by management and performance fees, was more than £1 billion in the year to March 2021, boosted by funding of around 44 per cent in the 2020 calendar year. But profits fell to just £119.7 million in the year to March 2022. .
Rokos himself has earned £509 million in the year to March 2021. However, in the latest results, the member with the biggest rights was paid just £4.2 million.
Although some macro funds were hit hard in autumn 2021, when markets began to worry about the prospect of rapid interest rate increases, the sector enjoyed its best year since the global financial crisis in 2022. Macro funds, which trade in global bonds, currencies and other markets, gained 8.8 percent to the end of November last year, according to the HFR data group.
This year he was able to profit from a large and long movement in the bond market, which was triggered by sharp inflation around the world. The yield on two-year US Treasury notes, for example, has jumped from 0.7 percent to 4.4 percent, while the UK 10-year gilt yield has risen from just under 1 percent to 3.7 percent. Yields rise when prices fall.
Rokos was a star trader at the hedge fund firm Brevan Howard, which he co-founded and where he made billions of dollars in profits for investors trading bonds and options, earning a reputation as one of the world’s most watched macro traders.
laurence.fletcher@ft.com