Macro Funds

George Soros, the billionaire who gained fame by successfully wagering against the pound in 1992, said he was betting on the currency leading up to the vote. In the days before, Soros had warned that sterling could slump more than 20 percent against the dollar as voters were grossly underestimating the true cost of the U.K. quitting the EU.

Soros made money on other investments that were designed to profit from falling markets, a spokesman said Monday. His Soros Fund Management took a short position in Deutsche Bank AG of about 7 million shares Friday as bank stocks tumbled.

Soros built his reputation as a macro investor, a strategy that seeks to profit from economic events and trends by trading everything from currencies to commodities. Macro funds that made money on the U.K. vote include Graticule Asset Management, run by Adam Levinson, people with knowledge of the firms said.

Macro hedge funds had a low level of risk on before the decision, according to a survey last week by research firm Drobny Global Advisors LP. Such funds are likely to have posted performance ranging from losses of 2.5 percent to gains of 0.5 percent in the aftermath of the vote, Philippe Ferreira, head of research at Lyxor Asset Management, said in a report.

Nonetheless, a macro hedge fund run by H2O Asset Management slumped 14.4 percent on Friday, according to data compiled by Bloomberg. The H2O Vivace fund had managed about 209 million euros ($232 million) at the end of May, according to its website.

Stone Milliner Asset Management, the macro fund run by Jens-Peter Stein and Kornelius Klobucar, lost 0.2 percent in the Class A shares, Series I version of its fund this month through Friday, according to an investor update. It has lost 1.2 percent this year.

‘Surprising Turn’

Discovery Capital Management LLC, the macro fund run by Robert Citrone, posted a 0.5 percent gain for the month in its Global Opportunity Fund through Friday and a loss of 2.5 percent for the year, according to an investor update. The fund said the highest conviction short wagers in its portfolio are in the U.K. and European equity markets.

“With a Remain vote, we had believed risk assets in general would have had a sharp rally over the next 3-4 weeks, from which a meaningful correction would have unfolded,” the South Norwalk, Connecticut-based firm said. “This surprising turn of events has accelerated our roadmap that we had for the August-October time frame.”