HEDGE FUND DECCA LOST 25% OF ITS VALUE IN ROUT

A hedge fund managed by former Hutchin Hill Capital trader Shahraab Ahmad lost a quarter of its value after its bets against volatile markets backfired, according to people with knowledge of the matter.

The Decca Fund, which Ahmad runs at London-based City Financial Investment Co., focuses on U.S. and European credit and equities. The fund had built up large short-volatility bets and lost as they unraveled in the market turmoil, the people said, asking not to be identified because the information is private.

A spokesman for City Financial, which manages $3.3 billion, declined to comment. The Decca Fund oversaw about $700 million last year.

Trillions of dollars were wiped from global stocks as crowded short-volatility wagers placed amid speculation that central-bank money printing would keep markets calm dramatically imploded. The collapse prompted Credit Suisse Group AG and Nomura Holdings Inc. to liquidate two investment products, while more than a dozen others were halted after their values sank.

Decca’s loss is one of the largest known about in the global upset, which mainly hit hedge funds using computer-driven models to bet on market trends. The fund recouped some of its losses this week, one of the people with knowledge of the matter said.

Before starting Decca Fund in 2015, Ahmad managed the Hutchin Hill Liquid Credit Master Fund. He was previously a partner at Stamford, Connecticut-based hedge fund Sailfish Capital Partners and also worked at JPMorgan Chase & Co.

Ahmad’s fund returned 4.3 percent last year, following a 20 percent gain in 2016 and 15 percent in 2015, according to a letter to investors seen by Bloomberg.

Source: Bloomberg

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