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November 29, 2017  

Profitable Comeback for Global-Macro Pro

Mark Hart has pulled off an impressive turnaround at his Corriente Advisors.

After spending several years focused on an unprofitable bet against the Chinese yuan, Hart in April launched a diversified global-macro fund with $31 million. Assets under management have since doubled to $62 million, thanks in part to a year-to-date return of 52% as of Oct. 31. A one-month gain of 12.5% in October was the best monthly showing so far for the vehicle’s U.S.-domiciled component, Corriente Partners 2.

“The seven months since our launch have provided an exceptional environment for global-macro trading,” investor-relations head Worth Wray wrote in his latest performance update. Corriente believes “a fresh multi-year global liquidity cycle [has] likely begun,” he added.

The fund invests in stocks, equity derivatives and spot currencies. But Hart appears to have abandoned his long-time short position in China’s currency — the focus of a 2016 Bloomberg profile titled “The Seven-Year Short.” Losses stemming from that trade forced Corriente to shutter an earlier version of its global-macro fund in 2012. A smaller fund dedicated to shorting the yuan also appears to have been liquidated.

The investment parameters for Corriente Partners 2 include digital assets, but Hart and his team so far have shunned purchases of bitcoin and other digital currencies due to “ongoing custody challenges.”

“Although we see significant opportunities in bitcoin and other blockchain applications, we have expressed our views solely through publicly traded equities and spot currencies since inception,” Wray wrote.

Corriente’s first global-macro fund, which launched in 2003, generated profits that averaged about 10% annually, even factoring in losses suffered after the financial crisis. To entice former limited partners, Hart is offering to honor their original high-water marks if they invest in Corriente Partners 2.

Once the fund’s assets reach $100 million, Hart plans to close the door to new investors. From then on, Corriente would accept additional commitments from existing backers until the fund reaches $500 million — at which point it would stop accepting capital altogether.

Meanwhile, the Fort Worth, Texas, firm has been adding staff, most recently hiring Matthew Gilman as chief financial officer and chief compliance officer. Gilman, who arrived last month, previously served as chief financial officer at Hound Partners. The addition boosted Corriente’s headcount to eight.