Now, with seed money from his old employer -- U.S. hedge fund powerhouse Tudor Investment Corp. -- Wadhwani, 43, is hoping to benefit from that same sort of economic imbalance in his new global macro hedge fund.
Set to launch next month, the fund will focus on the leading OECD countries. Global shifts now under way should provide plenty of opportunities, says Wadhwani, who was born in Kenya, raised in India and got his Ph.D. in economics at Cambridge.
The U.S. current-account deficit has risen to more than 5 percent of gross domestic product, he says, and that level -- judging by the dollar’s decline -- is hard to finance. He also cites household debt in both the U.S. and the U.K.: Although borrowing has supported growth, Wadhwani says, it’s now so high that it could begin to choke off consumer demand.
“When you have the kinds of imbalances we have, they usually precede significant [asset] price moves,” says the onetime Tudor research director. “I would be surprised if there wasn’t further volatility in large countries over the next two or three years.” Volatility, of course, is a boon to funds able to exploit it.
Wadhwani plans to name his fund in honor of John Maynard Keynes, whose multiple talents make him the fund manager’s role model. Keynes not only revolutionized economics with his theory of demand management, he advised governments, chaired an insurance company and invested money for a syndicate of friends as well as King’s College, Cambridge. “He in effect ran a hedge fund,” says Wadhwani, who notes, “He had a stellar record.”
