(Bloomberg) -- Even by his own standards, last month was extraordinary for macro hedge fund manager Said Haidar.
The money manager, who runs a high-conviction $1.3 billion trading strategy, guided his Haidar Jupiter fund to a 30.65% gain in January, the best month since he started it more than two decades ago, according to investor letters seen by Bloomberg. The gain came after a return of almost 70% last year.
While the letter did not say how Haidar achieved the returns in January, the surge follows his statement last month that traders were not going far enough to reprice rate-hike bets in response to spiraling inflation.
Haidar Capital Management joins a string of macro hedge funds profiting in a difficult month for stock-trading peers. Short-dated Treasury yields rocketed higher in late January amid expectations that the Federal Reserve would have to be more hawkish.
“As 2022 progresses and labor markets continue to tighten, we expect markets to gradually price in more central bank rate hikes,” Haidar wrote to clients last month. “This is likely to result in continued choppiness in risk assets, as investors adjust their expectations regarding the length and magnitude of hiking cycles required to control inflationary pressures.”
Read more: Macro Funds Top Peers in January After Years of Struggle
Roughly three quarters of his fund's assets were wagered on fixed income and commodities markets at the end of last year, according to one of the letters.
A spokesman for New York-based Haidar Capital Management declined to comment.
While much of the $4 trillion hedge funds industry now aims for steady returns to cater to risk-averse clients such as pensions, Haidar runs a high octane strategy where double-digits gains or losses are frequent. Over the last two decades, his hedge fund has lost more than 10% in a month five times, while making equivalent gains 18 times, according to his investor letters.
| Best Months | Gain | Worst Months | Loss |
|---|---|---|---|
| Jan-22 | 30.65% | Nov-20 | -24.55% |
| Sep-21 | 26.40 | Jun-21 | -18.06 |
| Mar-20 | 25.26 | Apr-15 | -15.33 |
| Jul-20 | 18.23 | Dec-15 | -13.02 |
| Aug-19 | 18.04 | Oct-15 | -12.05 |
| Source: Investor letters |
In a Bloomberg interview on Jan. 27, Haidar said Fed policy should prompt the yield curve to flatten and yields at the short-end to climb further. That's due to traders underestimating the eventual rise in interest rates and the central bank's process of balance sheet reduction or quantitative tightening.
“Last time they did QT I remember writing a paper arguing that the curve would steepen. I was totally wrong,” he said. “Ultimately QT is a tightening of monetary policy, it's a draining of liquidity, it's going to weigh on risk assets and it's going to cause the long end of the curve to go bid.”
Read More: Bond Veteran Haidar Says Market Too Scared to Boost Fed Bets
Haidar founded his eponymous firm in 1997. He previously worked at Credit Suisse First Boston and Lehman Brothers.
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