BH Macro – eventful and dull at the same time – BH Macro’s chair says that “To say that last year was an eventful year for BH Macro Limited would be an understatement, both for long-term shareholders in BH Macro Limited and for shareholders in the former BH Global Limited.”
The merger of the two companies, tender offers, and changes to the management agreement kept the board busy and see-sawing markets kept the managers on their toes. However, NAV returns for 2021 were just 2.8% for the sterling shares and 2.7% for the dollar shares and the NAVs didn’t fluctuate by much either. The returns come in about the same level as the ongoing charges ratio – this decreased from 6.81% to 2.43% on the sterling class and decreased from 7.13% to 2.25% on the dollar class, primarily due to changes in the level of performance fee as a result of relative performance.
The manager says (in typical laconic fashion)
Over the course of 2021 our core theme of persistent and rising inflation did play out and deliver returns, but other, usually correlated themes such as rising long-end rates and steepening yield curves did not. It was a year when success often required precisely targeted expression in addition to having the right view. At times, markets that are in our main area of focus suffered sharp reversals and liquidity disruption due to large position unwinding, further complicating macro trading. We avoided the larger pitfalls thanks to our structural capital diversification as well as rapid and skilled action by the trading and risk teams.
Overall, relative value strategies and trading in inflation, volatility and some minor markets performed well as did the capital deployed early in the year to digital assets, however given that the overall environment was more difficult for traditional macro trading, it was a year of mixed results. The Master Fund ended 2021 with modest gains.
[2022 seems to have been a more profitable period for the company – over three months the NAVs for both share classes are up by 9.9% and 12.4%, with most of that coming since the outbreak of war. Heightened volatility will have worked in the fund’s favour.]
BHMG / BHMU : BH Macro – eventful and dull at the same time