Thursday, December 01, 2022

‘New Soros’ achieves 145% return betting against the United Kingdom

'New Soros' achieves 145% return betting against the United Kingdom

Legendary investor George Soros crafted his legend by placing aggressive bets against the pound sterling, which twisted the arm of the mighty Bank of England. Exactly 30 years after that incident (it happened in September 1992), another fund manager is following in Soros’s footsteps. And it’s going to sleep.

The outstanding disciple is Crispin Ode, one of the hedge fund managers (hedge funds, in jargon) is best known from the United Kingdom. This year, their benchmark fund has achieved a stratospheric 145% return betting against British government bonds.

Betting against, or lowering, the price of government bonds has been one of the operations of the year, as rising inflation forces central banks to raise interest rates more aggressively than they had a few months ago, and investor bonds. dump the .

UK 10-year bond yields climbed to 4.11%, the highest since July 2011, after the Bank of England raised rates and said it would soon start selling government bonds. The 10-year yield has risen nearly 270 basis points in 2022, and is on track for its biggest annual increase since 1994. Yields inversely correlate with bond prices.

Odey, whose namesake Odey Asset Management manages £4bn (€4.57bn) in assets, believes rising inflation is here to stay and that central banks will have to raise rates sharply.

The decline in the value of the British public debt has also affected the value of its currency, the pound sterling. “I don’t think we can start to see an increase in pounds just yet,” Ode told TODAY newspaper. financial Times, The investor does not deny that parity against the dollar can be achieved, something that has never happened before.

Crispin Ode, who was one of the major supporters of Brexit, rose to fame during the 2008 financial crisis when he made a fortune by selling bank shares. He is known for his volatility, as his fund regularly posts double-digit annual gains or losses.

manager of hedge fundsA well-known donor to Britain’s Conservative Party has also delivered strong returns by buying shares in oil and coal companies whose prices had fallen sharply due to exclusions from environmentally conscious funds.

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