Cadwyn Capital, the London- and Cardiff-based hedge fund firm set up last year by Gerald Holtham, former cio at Morley Fund Management, has not lived up to its hype and has suffered poor returns for its global macro fund. Since launch in July, the fund is up a mere 1-2%, well short of its targeted annual return of 12-15%, acknowledged Holtham. “The macro fund’s been dull; it’s up, but not by very much,” he said, adding that the fund “would be slightly stretched” to achieve its target.
Lower-than-expected volatility has contributed to the poor performance, Holtham explained. “We have to gear up and take more risk [by] taking bigger bets.” The fund has been net-long equity, but with a small short on Japanese stocks. It has gone long the Standard & Poor’s 500 index and short the Nasdaq. Currency plays have included going long the Swedish krona and short the New Zealand dollar, “which worked out very well,” he added.
Any new clients will be offered monthly liquidity with a 2/20 fee structure, but the seed investors agreed to lock their money up for two years in return for a fee rebate. Holtham said his investors have not expressed concern about the fund’s performance.