Discretionary Global Macro: A Manager’s Perspective

Kenneth G. Tropin

This article was first published as a chapter in Global Macro: Theory and Practice, by Risk Books.

While global macro is one of the “original” hedge fund strategy types, it has generally evolved alongside the industry – from single managers trading a portfolio to more complex multi-manager, multi-asset class portfolios. Managing a discretionary global macro fund is therefore a complex and expensive venture. Many macro funds are still dominated by a founder or key risk taker who tends to concentrate a fund’s risk profile, but the majority of large macro funds now have multiple portfolio managers trading a portion of the fund. The typical macro fund trades a broad variety of asset classes, geographic regions and instrument types, necessitating a robust investment platform and an equally robust operational backbone. The increasingly institutional nature of hedge fund investors also reinforces this need for robust systems, processes and reporting, both internally and externally. Successful funds should have a well-defined business model, top calibre trading talent, a disciplined investment process, robust risk management and a sophisticated operational infrastructure.

While there is

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