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January 24, 2018  

Corriente Bars Entry Amid Stellar Results

Corriente Advisors already is halting contributions to a global-macro fund it launched less than a year ago.

The move follows a booming start for the Forth Worth, Texas, firm’s Corriente Master Fund 2, which has grown to more than $100 million from an initial $31 million while delivering spectacular returns. The fund gained 121.2% in its first nine months of trading, ending Dec. 31.

Corriente founder Mark Hart plans to stop accepting commitments from new investors on March 1, but will continue to take capital from existing limited partners. Corriente also could add backing from investors that take stakes in its business or agree to higher fees.

“The nine months since our launch have provided an exceptional environment for global-macro trading,” Corriente wrote in a letter to investors this month, citing a confluence of improving economic activity, subdued inflation and rising institutional investment in the cannabis and cryptocurrency industries.

Indeed, Corriente Master Fund 2’s winning bets have included long positions in the stocks of cannabis, blockchain-technology, biotechnology and e-commerce businesses — with those plays helping to generate a 28.9% gain for the vehicle in December alone.

While Corriente so far has limited the fund’s exposures mainly to equities, it could expand into equity-derivative and digital-currency positions.

The first Corriente Master Fund launched in 2003 and also got off to a strong start. But that vehicle’s returns began to dip in 2009 amid wrong-way bets on the Chinese yuan, leading to its shutdown in December 2012. All told, the fund produced an annualized return of 10%.

In attempting to win back prior investors for the new fund, Corriente agreed to honor the original fund’s high-water marks. But that offer is off the table for further commitments to Fund 2, now that its assets have reached $100 million.

Fund 2 has a one-year lockup period and a minimum investment requirement of $5 million.