Hedge Fund Trader Melkman Weighs Reboot as His Light Sky Macro Returns Money

(Bloomberg) -- Ben Melkman is rethinking the way he trades after five years running his own firm and will return outside capital in his $1 billion Light Sky Macro, according to a person familiar with his plans.

The former Brevan Howard Asset Management partner told investors they'll get back most of their money by April 30, the person said. Melkman, 42, opted to shut his fund after deciding that managing money with a focus on monthly or quarterly returns doesn't jibe with the longer-term nature of the trades he prefers.

He expects to begin trading again later this year, either running his own firm with money that can be locked up for several years or by joining another entity that would allow him to concentrate solely on longer-term investing without the burden of managing a business, the person said.

A spokesman for New York-based Light Sky declined to comment. The Wall Street Journal reported earlier Wednesday that the firm plans to close.

Melkman has produced slightly positive returns since he launched Light Sky in 2017 with backing from billionaire hedge fund managers Steve Cohen and Dan Loeb. Performance has improved over the past three years, with annualized gains of about 7%. The fund is shutting at a time when other macro managers, after a protracted period of lackluster returns, are finally posting stronger numbers as market volatility increases.

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With a background trading in developed and emerging markets, Melkman made a name for himself at Brevan Howard with profitable bets in Argentina before striking out on his own.

His current fund has been betting on the rise of Fannie Mae and Freddie Mac preferred shares, the person said, and he expects to carry those positions to his next trading gig. The two mortgage giants have been under federal control since 2008.

Melkman also is eyeing fresh wagers on Argentina, where debt is priced to default, even though he expects next year's presidential election to alter the political landscape.

Other core bets where he sees longer-term rewards are an energy transition toward nuclear power and depreciation of the dollar as foreigners repatriate the money they've invested in U.S. assets.