Global macro hedge fund Arete Capital Partners is tilting towards shorter-duration assets amid an evolving rate environment which carries far-reaching consequences for inflation and the cost of capital.

Global macro hedge funds from across the emerging market, systematic and discretionary spectrum may be well-placed to capitalise on prevailing equity valuations amid economic “normalisation”, Lyxor Asset Management strategists said this week.

A victory for Democratic candidate Joe Biden in the approaching US presidential election would see a “limited short-term negative reaction”, and could herald more fiscal stimulus coupled with a dovish monetary policy, according to Algebris Investments’ head of macro strategies Alberto Gallo.

Pierre-Henri Flamand, Man GLG’s CIO emeritus and hedge fund industry veteran, says the huge economic stimulus from governments to combat the coronavirus crisis is fuelling the threat of inflation, and is warning investors to “be vigilant rather than to relax”.

ThirdYear Capital, a Munich-based quantitative macro specialist, has paired up with Cologne-based fund initiator Agathon Capital to unveil a new systematic global macro hedge fund strategy which targets opportunities stemming from short-term economic data trends.

The UK’s slide into recession could squeeze investor flows into the country, carrying far-reaching implications for hedge funds focused on UK markets.

Alberto Gallo, head of macro strategies at multi-strategy credit and equities hedge fund Algebris Investments, has compared investors in government bonds to “boiling frogs” who risk seeing their returns “wiped out” from future inflation rises.

BlueBay Asset Management, the London-based fixed income and emerging markets manager, is warning the recent uptick in economic activity could give way to “a more difficult backdrop” in August, as the future direction of the global economy continues to hinge heavily on developments surrounding a potential coronavirus vaccine.

Savvas Savouri, chief economist and partner at long-running UK hedge fund manager Toscafund, says UK chancellor Rishi Sunak’s economic update has “supercharged” his confidence.

Brummer & Partners, a long-running Swedish multi-strategy hedge fund firm, saw its flagship Brummer Multi-Strategy vehicle up marginally in April, as solid gains across its long/short credit, systematic equity, relative value and macro strategies were offset by sharp losses in tech-focused long/short equity trades.