Tuesday, January 31, 2023

Mike Novogratz sees “golden age” for macro

Former hedge fund manager Mike Novogratz believes the next five years will be a golden age for global macro — the strategy he left behind when he moved into crypto.

“We are probably going into what will be three to five years of the golden age of macro,” said the digital assets specialist and founder of Galaxy Digital Holdings at the SALT Conference in New York.

“For the last 15 years we have had this great moderation of low inflation and low volatility in currencies and interests. And all that’s changed.”

He said high inflation and growing divergence between central banks would provide a “field day for macro traders,” citing the difference between Japan and US approaches in monetary policy as an example.

Novogratz was a manager with Fortress Investments, serving as co-chief investment officer in global macro.

Global macro has outperformed most other strategies this year, rising 9.3% in the first eight months compared to a 4% decline by the average hedge fund, according to data from Hedge Fund Research.

Heightened volatility across asset classes and stock market declines in August brought an end to the summer rally and benefited macro and CTA managers, this year’s outperformers.

READ MORE: “This job’s not easy; you need emotional resilience” – Dave Fishwick on global macro, markets and mentality

Digital assets were key theme on the first day of the SALT Conference, with regulation dominating many of the discussions.

Novogratz said “we are at a point of frustration” in terms of the US regulatory outlook. “By his actions, [SEC chair Gary Gensler] obviously doesn’t want to forward crypto right now,” he added. The two worked together at Goldman Sachs.