Investment manager Neal Berger’s Contrarian Macro Fund chalked up gains of 163% last year on the back of a series of successful bets that US Federal Reserve rate hikes would cause market turmoil, according to a report by Bloomberg.
The report cites an investor document as revealing that the $200 million fund, which launched in April 2001 with partner capital from Berger’s Eagle’s View Capital Management fund of funds business, placed bearish bets on stocks and bonds after correctly predicting that a decade of lenient Fed fiscal policy was about to come to an end.
“The reason why I started the fund was that central bank flows were going to change 180 degrees. That key difference would be a headwind on all asset prices,” Berger told Bloomberg. “One had to believe that the prices we saw were, to use the academic term, wackadoodle.”
And Berger expects the economic turmoil to continue in the near future and is planning to keep the fund’s short bets on Europe and American assets in place.
“You have your variations, your rallies day-to-day, month-to-month,” Berger added. “But big picture, everything is going down.
