Digital Assets Report

Newsletter

Like this article?

Sign up to our free newsletter

Calvion: Best Macro Hedge Fund

Related Topics

Central to how New York-based alternative asset manager, Calvion navigated the last 18 months was a combination of three factors: “An excellent team and a flexible process which allowed us to quickly react to the rapid changes we all experienced in Q1; a rigorous investment process and risk management framework specifically geared towards the type of macro regime shifts and political catalysts that we have witnessed; and great investors with whom we worked closely throughout the last 18 months,” according to Pascal Kummert, Founder and CIO. 

Central to how New York-based alternative asset manager, Calvion navigated the last 18 months was a combination of three factors: “An excellent team and a flexible process which allowed us to quickly react to the rapid changes we all experienced in Q1; a rigorous investment process and risk management framework specifically geared towards the type of macro regime shifts and political catalysts that we have witnessed; and great investors with whom we worked closely throughout the last 18 months,” according to Pascal Kummert, Founder and CIO. 

Reacting to Covid-19

Calvion’s systems alerted them to the developments around Covid-19 in early January 2020, allowing them to get ahead of the curve. “Through this, our understanding of what the characteristics of the virus meant, in terms of required counteractive policy tools, allowed us to position ourselves in February, well before the market eventually reacted in early March,” Kummert says. 

“We went short equities in the US, on an index level, selected hotel REITs and cut most of our less liquid emerging market exposures,” he says. After navigating the March turbulences profitably, the rest of the year was about picking the right asset classes to play for the recovery. 

Calvion recently launched a co-investment initiative to allow investors to partner with them on high conviction trades across credit, equity and macro investments. “It allows institutional investors to participate in the asymmetric upside associated with political catalysts and regime shifts where there is a rich opportunity set,” Kummert comments.

Further, Calvion’s firms focus on macro regime shifts, and political catalysts lend themselves clearly towards volatility expressions. “This year, we have added expertise in that area. We believe this will pay real dividends as we enter a more volatile political and macro environment in 2022,” he says.

Calvion is planning three new fund launches: a “Frontier Income Growth” fund that harvests FX and local currency rates carrying high-yielding frontier markets, including Egypt, Ukraine, Ghana, Kazakhstan, Uruguay and Nigeria; a “Systematic Behavioural Currencies” trading fund, with shorter horizon systematic strategies that can capture behavioural shifts in FX markets; and the firm will seek to carve out an emerging markets cyclical equities-focused crisis recovery fund and an emerging markets technology equities-focused fund. 

Reflecting on the past year 

In terms of lessons learned, Kummert says: “Last year was a year full of lessons. An interesting lesson I learned was that our investment process can identify growing shifts in regimes much earlier than others, which can lead to positions that can be frustrating as the market catches up.” This happened in February 2020, when their Covid-19 hedges actually cost them returns as the broader market initially looked through the risks of a pandemic. Trusting in their process was reaffirmed to Calvion when those hedges played out in March. 

Looking to the future, Kummert says: “I expect we will open a London office in the next 12-18 months, bringing new investors and different perspectives to the team. As we launch new funds and initiatives, we will broaden our investor base, and that will require flexibility to meet their unique needs. I am excited about the opportunities for growth in the next number of years.” 


Pascal Kummert, Founder, CIO, Calvion
Pascal Kummert founded Calvion in 2017. Previously, he was an Executive Director at Goldman Sachs, where he specialised in cross-asset macro, specifically trading European and EM government debt, global currencies, rates and equity index futures. Kummert also was a Vice President at Morgan Stanley, where he traded bonds and credit default swaps of peripheral countries. He started his career at Morgan Stanley as an analyst for Special Situations and Real Estate Private Equity funds. He holds a Bachelor of Science in General Management from the European Business School in Germany.

Like this article? Sign up to our free newsletter

Most Popular

Further Reading

Featured