Bruce Kovner and his team at Caxton sure know how to not lose money.
And this month is a good reminder. While the overall markets have tumbled in recent days amid turmoil in the European markets, Caxton Corp., the firm founded by Kovner 27 years ago is up for the month. Through Monday, its Caxton Global Investments fund had climbed 1.30 percent in May, compared with a loss of 9 percent or so for the S&P 500, for example. Altogether, the macro fund is up more than 5 percent year-to-date.
New York-based Caxton — won’t comment, but according to sources, the fund — which has been directed by chief investment officer Andrew Law on a day-to-day basis for more than two years now — has made money across most markets.
The former Goldman Sachs Managing Director, who has been with Caxton for seven or eight years, did especially well trading currencies and equities. Meanwhile, in the past week, Law pulled in a lot of the fund’s risk, enabling him to avoid getting clipped by the markets’ near-daily drops and surge in volatility.
Although little is known about Law, he clearly meshes squarely with Kovner’s risk averse ways, and is heavily credited for the fund’s remarkable 13 percent or so return in 2008 when most of the financial world was crumbling.
As a result, he has helped his boss to boast having just one down year in his 27 years — 1994, when the fund fell a mere 2 percent in a year that was as disastrous for macro traders as 2008 was for most investors, except short sellers.
Kovner, of course, is well known for supporting conservative causes, including chart schools. At 65, he no longer runs money on a day-to-day basis.
Stephen Taub, who has covered the hedge fund industry for 30 years, is a contributing editor to Institutional Investor and Absolute Return-Alpha magazines.
