Ex-Credit Suisse Trader's Hedge Fund Said to Gain 20% This Year

(Bloomberg) -- Former Credit Suisse Group AG proprietary trader Charlie Chan's macro hedge fund has returned more than 20 percent so far this year as bullish bets on Asian equities and currencies paid off, according to people familiar with the matter.

The $127 million Splendid Asia Macro Fund made 19 percent in January and February, according to a newsletter seen by Bloomberg. Additional gains in March took the fund's returns this year above 20 percent, said the people, who asked not to be identified because the information hasn't been publicly disclosed.

Splendid Asia made money as peers such as Dymon Asia Macro Fund booked losses wagering on a strengthening dollar under U.S. President Donald Trump. While Chan didn't specify in the newsletter what trades performed well, he wrote that muted visibility on U.S. policies have weighed on the dollar.

"The hesitant trading pattern in the U.S. dollar reflected the lack of clarity from the Trump administration on his promised tax reforms," Chan said in the February newsletter to investors. "The market has to wait for a few more months for the tax reforms to be tabled."

Yen Strengthens

The yen ended the first quarter 5 percent up against the dollar. Other Asian currencies, with the exception of the Philippine peso and the Hong Kong dollar, also appreciated as optimism over the region's economic outlook lured investors. Six of the 11 Asian currencies tracked by Bloomberg weakened in 2016, as the dollar rallied on expectations of U.S. rate hikes and the election of Trump.

The MSCI Asia-Pacific Index surged 8.8 percent in the three months to March, the best quarter for Asian stocks since 2012, as demand for riskier assets grew, fund managers favored their cheap valuations and expected the region to benefit from improving global growth. The Eurekahedge Asia Macro Hedge Fund Index dropped 1 percent in the first two months of this year.

Profits this year helped the Splendid Asia Macro Fund bounce back from a 10 percent loss in 2016. The fund, set up in August 2011, is no stranger to outsize returns. It made 63 percent for investors in 2012, its first full year of trading, according to the newsletter.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net.

To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Peter Vercoe