UPDATE 1-Hedge fund COMAC to return capital after hit from Swiss franc
By Nishant Kumar
LONDON Jan 20 (Reuters) – London-based hedge fund COMAC Capital is returning external capital to investors after suffering losses from last week’s surprise jump in the value of the Swiss franc, two sources familiar with the matter said on Tuesday.
COMAC Global Macro Fund Ltd, managed $1.2 billion as at the end of last month, according to an investor newsletter seen by Reuters. However, the hedge fund led by founding partner Colm O’Shea, lost 8 percent last week, according to the sources.
The franc surged as much as 40 percent to a high of 0.85 to the euro after the Swiss National Bank (SNB) lifted its 1.20-franc cap on Thursday.
One of the sources said COMAC told investors of its decision in a letter sent on Tuesday. “The SNB decision to abandon the currency floor led to the most significant loss of Colm’s career and will have a substantial negative impact on the macro fund and firm,” the source quoted the letter as saying.
“This leads Colm to conclude that returning capital is in the best interest of investors,” he added.
COMAC will continue to manage internal capital of about $150 million, the sources said.
Macro hedge funds focus on major economic trends and bet anywhere they see value, including on stocks, currencies, bonds, commodities and derivatives markets.
A spokesman for COMAC declined to comment.