Three new managers will join the $32bn hedge fund to help capitalise on looser policy

Citadel adds traders to profit from central bank stimulus shifts

Hedge fund Citadel has boosted its team specialising in bonds and currencies with three new fund managers, as it seeks to capitalise on the market opportunities thrown up by dramatic central bank shifts towards looser monetary policy.

Jonathan Bayliss, former head of macro rates and a partner at Goldman Sachs Asset Management who has also worked at hedge fund Tudor, has been hired as a senior fund manager in London, according to people familiar with the firm’s plans. Mr Bayliss, who will be part of the macro strategies team, is set to join the firm later this year.

The hedge fund, which was founded by trader Ken Griffin and which runs $32bn in assets, has also hired Vishnu Kurella as a senior fund manager in New York. Mr Kurella, who specialises in cross-asset volatility and who previously worked at hedge fund Caxton, is set to join next month. Eric Rains, who previously worked at hedge fund Bluemountain, will join the firm as a fund manager in Mr Kurella’s team.

Citadel declined to comment. The hires reflect a significant pickup in opportunities for macro hedge funds, which have chalked up their best half-year of returns since 2013, at 5.01 per cent, according to data from HFR.

Macro funds, made famous by the likes of George Soros and Paul Tudor Jones, bet on moves in global bond, currency and stock markets. Such funds have struggled in recent years amid huge stimulus from central

banks and ultra-low interest rates that have proved hard to profit from.

However, many are capitalising on the large fall in bond yields this year — the yield on the 10-year US Treasury has fallen from 2.69 per cent to 2.05 per cent and the 10-year German Bund yield has dropped from 0.25 per cent to minus 0.42 per cent — as central banks have performed a U-turn from tightening to loosening monetary policy. That has proved a profitable trade for funds betting on a return to lower borrowing costs.

“Every central bank is live right now,” said one macro hedge fund executive. “The opportunity set is as full and robust as it has been in many years.”

Among those making money from the bond market rally is Caxton Associates, whose main fund is up more than 13 per cent, while Brevan Howard has gained around 10 per cent, one of its best half-year of performances since the financial crisis.

Profits on macro trades have helped Citadel’s flagship Wellington fund gain around 15 per cent so far this year, said a person who had seen the numbers, having risen 9.1 per cent last year.

The hires also come as some rival firms cut back on their macro trading amid lacklustre performance. Element Capital recently cut around a tenth of its staff and closed its portfolio manager programme.

Citadel’s recruits will be part of a team led by Colin Lancaster, who joined the firm at the start of last year from Balyasny to build out a macro trading team. A separate macro team, led by Edwin Lin, has been running at Citadel for around a decade.