Neal Berger ran Eagle’s View Capital Management as a fund-within-a-fund for 16 years, but in April 2021 launched his own fund. In 2022 – its first full year of operation – the Contrarian Macro Fund rose a whopping 163 percent, Bloomberg reports after gaining access to an investor document.
TIGHTENING: The Federal Reserve, chaired by Jerome Powell. Photo: NTB
The fund’s basic stance since inception has been to load up with bets that the Federal Reserve would end a decade of monetary policy stimulus, a start that took place while the US central bank still described inflation as transitory. By the time the Fed changed course in March last year, Berger had started accepting drawings from external customers.
– The reason I started the fund was that the central bank’s money flows would turn 180 degrees. This important difference would constitute a headwind for all asset prices, the manager explains to the news agency.
Bet on yen rise
According to Bloomberg, Berger uses futures contracts to short stocks and bonds he considers “distorted” after years of stimulus. The Contrarian Macro Fund has mostly taken positions against European and American assets, with “hedges” shedding during more positive periods.
SHORTER “EVERYTHING”: Hedge fund manager Neal Berger at Eagle’s View Capital Management. Photo: LinkedIn
– 19,000 billion dollars in government debt traded at negative interest rates, the SPAC boom, the crypto boom and valuations on and off the stock exchange are all stripes on the same zebra – a sea of liquidity that was first a response to the financial crisis and then the corona crisis, says Berger to the news agency.
When the Bank of Japan surprised just before Christmas by widening the band the ten-year government interest rate can fluctuate within from plus/minus 0.25 percent to plus/minus 0.50 percent, Berger’s fund shorted Japanese bonds and bet on a rise in the yen.
- A shell company where the purpose is to raise capital and list the company on the stock market before one or more companies are acquired for the SPAC. Because the company is already listed on the stock exchange, you avoid spending time on the listing process.
- Has been a very popular tool in the US for the past couple of years. For example, the Norwegian battery company Freyr was listed on the stock exchange in the USA in this way, through the SPAC Alussa Energy.
Will sit quietly in the boat
The manager, who has over 30 years of experience on Wall Street, plans to sit on the short positions for years.
– The pain is not over yet, and we only see the end after risk assets have traded sideways for many months. You will see upswing from day to day and month to month, but the big picture is that everything is going down. Price movements are ultimately the bible, says Berger to Bloomberg.
New York-based Eagle’s View has around $700 million in total assets under management, of which $200 million is in the Contrarian Macro Fund.
Tags: Hedge fund manager Neal Berger thinks fund rose cent year
