INSIDER TRADING

Chris Rokos and Partners Were Paid $1.2 Billion Before Hedge Fund Slid

Nishant Kumar
Mon, January 3, 2022

(Bloomberg) -- Billionaire Chris Rokos and his partners paid themselves 914 million pounds ($1.2 billion) just before their investors suffered a record year of losses.

Roughly 509.4 million pounds of that total went to Rokos himself for the year ending March 2021, the most since he started trading for his hedge fund firm, a filing with U.K.’s Companies House shows. A spokesman for Rokos Capital Management declined to comment.

The payout followed the 44% return that the macro trader generated in 2020, which helped lift his firm’s revenue by nearly four times to more than 1 billion pounds for the period, according to the filing. The $12 billion firm was on track to post a record loss last year, having slumped 25% through November.

Bond-market volatility in 2021 triggered by growing speculation that central banks would raise rates faster than expected to contain inflation hurt a group of high-profile macro traders including Rokos.

For all of 2020 through November of last year, Rokos investors made just about 8%, compared with a 19% gain for hedge funds on average, according to data compiled by Bloomberg. The S&P 500, although not the best comparison, rose 46%.

The 2020 results, however, show the outsized compensation hedge fund managers stand to reap in a good year. Yet even as the industry mints billionaires at a heady pace thanks to stellar returns, investors who stick around hoping the performance will repeat often end up with mediocre gains -- if not losses.

Rokos, who co-founded Brevan Howard, earned $4 billion at that firm from 2004 to 2012. He has an estimated net worth of $1.8 billion, according to the Bloomberg Billionaires Index.