Former Morgan Stanley currency trader Thiago Melzer, is set to close his Brazilian hedge fund, Upon Global Capital, having been hit by a double whammy of wrong-way wagers and rising double-digit interest rates in Brazil, according to a report by Bloomberg.
The report cites a notice on the Sao Paulo-based firm’s website as confirming the intention to return investor cash by 13 October following a vote on liquidation at a general meeting of clients next month.
The decision comes after the firm, which gained 20% last year, outperforming both the Anbima Hedge Fund Index and the local deposit rate that investors use as a benchmark, posted its worst month on record in April as a series of volatility wagers went awry.
Along with other Brazilian hedge funds, Upon Global has also been hit by massive redemptions after double-digit interest rates prompted investors to turn to the relative safety of high-yielding government bonds.
