Former currencies star fights to revive hedge fund after loss

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The former head of currencies at Citigroup, once dubbed the “world’s most powerful FX banker”, is trying to turn round his hedge fund after a tough 2018 put a dent in his record. Anil Prasad, who was Citigroup’s global head of foreign exchange and local markets before leaving the bank in 2014, saw the main fund of his investment firm Silver Ridge Asset Management lose 11.6 per cent last year, according to figures sent to investors and seen by the Financial Times. Mr Prasad has now been looking to a variety of trading ideas, such as a stabilisation in the Chinese economy and the inclusion of Saudi Arabia in major equity indices, to bolster the performance of the fund. The fund lost 1.4 per cent last month but is still up around 5 per cent so far this year, said a person familiar with the matter. The pick-up in performance comes at a tricky time for “macro” funds such as Mr Prasad’s, whose performance was marginally positive in 2016 before gaining 10.8 per cent in 2017. Clients pumped money into such funds, which specialise in big bets on movements in interest rates and currencies, in the wake of the financial crisis, as central banks made big and aggressive moves to stimulate economies. In recent years, however, as central banks have looked to gradually remove stimulus, returns have been lacklustre. Investors have withdrawn about $19bn from macro funds since the start of last year, according to data group HFR. Last year macro funds lost 4.1 per cent on average. Mr Prasad co-founded London-based Silver Ridge in 2014, having raised more than $500m, choosing the name because he had started his career as a silver trader. An auto enthusiast, he now works primarily out of offices in New York’s iconic General Motors Building, on the south-east corner of Central Park. Anil Prasad © Rahul Singh The main fund was managing less than $400m last year, according to a person familiar with the matter. Silver Ridge declined to comment on its assets. The launch of Mr Prasad’s fund was held up by the Financial Conduct Authority, which was investigating allegations of manipulation of the foreign exchange market. In November 2014 Citi was among five banks fined a total of £1.1bn by the FCA for failing to control business practices. Silver Ridge began trading at the start of 2016, having received a go-ahead from the FCA. Silver Ridge’s losses last year, which came mainly in the first six months, were, to a large extent, due to its bets against the dollar. The greenback rallied sharply against the euro in spring last year when European economic data came in much worse than expected. However, losses in the second half of last year were minor, despite the rapid sell-off in stock markets in the fourth quarter. This year the firm’s view that policy action by the Chinese government would help to stabilise the economy has already helped it benefit from a rally in Chinese and Korean stocks. Silver Ridge sold out before the April sell-off, in part because of the perceived risk of the US-China trade dispute hitting markets. The firm currently expects global inflation to remain subdued and global growth to stabilise as central banks hint at further supportive measures. This week a voting member of the US Federal Reserve’s rate-setting committee said the central bank may need to cut its main policy rate, if inflation falls short. One trading idea Silver Ridge is looking at is the impact on energy markets of the International Maritime Organization’s IMO 2020 regulations, which promote low-sulphur fuels, according to a spokesperson.