Merrill Vet’s Maiden Global Macro Fund Off To A Strong Start

May 6 2010 | 1:04pm ET

New York-based Auldyn Partners has recently launched a global macro hedge fund to take advantage of dislocations in global equity index futures and stock markets.

The firm’s maiden vehicle, the Country Alpha Fund, debuted in January and returned 20% through April. Its more volatile sister fund, Country Alpha Plus Fund, generated a 71% return in the same period.

In the first quarter, the fund focused on Spain, where it has been short futures on the Ibex35 Index, according to Ian Clague, a partner at Auldyn and a former co-head of debt derivatives and government bond trading for Merrill Lynch in Japan. On the long side, Clague’s bets include positions in the S&P 500 index futures and Switzerland.

“We see Switzerland as defensive against the sovereign debt crisis and the problems of the Southern Eurozone,” Clague told FINalternatives. “As we look ahead to the second quarter, we expect that large government budget deficits will prove to be very hard to close. Greece, Portugal and Spain will find this especially challenging. They face the headwinds of falling asset prices, which will depress gross domestic product and rising borrowing costs.” 

Clague also warned against the persistence of deflationary risks for the Southern Eurozone and Ireland. 

“Southern Eurozone countries face a tough choice on reform of their labor markets and public sector. If they do not reform, their labor costs and high taxation will continue to leave them uncompetitive with a rising Asia,” he said.


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