Rokos Capital Management

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Rokos Capital Management
Company typePrivate
Industry Investment management
Founded2015;9 years ago (2015)
Founder Chris Rokos
Headquarters23 Savile Row, London
AUM $15.5 billion (January 2023) [1]
Websitewww.rokoscapital.com

Rokos Capital Management LLP (RCM) is a British Alternative Investment Fund Manager (AIFM). RCM is headquartered in London, with offices in New York,Washington DC and Singapore. [2] It is authorised and regulated by the UK Financial Conduct Authority (Reference number 679721). [3] The firm has around 200 employees. [4]

Contents

History

RCM was founded in 2015 by Chris Rokos, a co-founder of hedge fund Brevan Howard, where he made $4 billion for the firm's investors from 2003 to 2012. [5]

In October 2019, Rokos was taking responsibility for all individual allocations of capital. [6] A spokesman was reported by the Financial Times as saying that the move would, “maximise the efficient deployment of capital”. They added, “The adjustment forms part of RCM’s ongoing efforts to manage fund capital as efficiently as possible in order to maximise returns for investors.” [7]

According to the Financial Times, RCM “specializes in betting how broad economic trends will affect global markets, in areas such as interest rates, foreign exchange, equities, credit and commodities.” [8]

RCM marked its first full calendar year of trading with a gain of approximately 20 per cent. [9] RCM was one of a number of hedge funds which had wrongly predicted the 2016 UK referendum vote on EU membership. Despite the result, the firm gained more than 2.5 per cent in the days immediately after the vote. The New York Times commented, “His ability to make money even when caught flat-footed, his admirers say, is a sign of his nimbleness as a trader.” [10]

The strong performance of RCM in 2016 was followed by two lacklustre years, reflecting a difficult trading period for macro hedge funds. Notwithstanding the market challenges, Rokos continued to build out the firm in readiness for the return of more favourable market conditions, and in 2019 RCM recorded a gain of 9.3%. [11]

In April 2020, Bloomberg reported that RCM had posted its best monthly gain of 14% in March and had reopened the fund to new investors. 2020 proved to be a successful year, gaining 44%. [12] 2021 though proved to be a more difficult market for RCM and other macro hedge funds. [13] RCM eventually reported a loss for the year of 26%. [14]

In 2022, RCM attracted $1 billion of new investment. [15] Bloomberg's Mark Gilbert commented, “Handing $1 billion to a hedge fund manager who lost a record 26% last year might seem like the ultimate example of throwing good money after bad. But the customers bankrolling an expansion of the $12 billion firm run by billionaire, Chris Rokos, know exactly what they’re doing – backing an investor who swings for the fences in the expectation that the good years will overcompensate for the bad. That’s the point of the asset class.” [16]

Gilbert continued, “Rokos, who was a founding partner of Brevan Howard Asset Management LLP, has a proven track record of making money in the past quarter of a century. Documents filed as part of a lawsuit he initiated in 2014 to annul restrictions on him setting up his own shop, revealed he generated $165 million for Goldman Sachs between 1995 and 1997. He then joined Credit Suisse, producing $340 million between 1999 and 2001. During his tenure at Brevan Howard, Rokos delivered almost $4 billion in profit.” [17]

In June 2022, the Financial Times reported that high levels of inflation and supply chain bottlenecks had created the best conditions for hedge funds trading bonds and currency markets since the 2008 financial crisis. [18] For the six months ending June 30, 2022, RCM reported gains of 12%. [19]

In January 2023, Bloomberg reported that 2022 had proven to be the most successful year for Rokos Capital Management since its creation, returning a gain of 51%. It said that the firm was “tapping in to the rising demand for macro hedge funds” and that it was in talks with its investors to grow assets under management by as much as $3 billion. [20]

Philanthropy

In September 2020, in reaction to the murder of George Floyd, RCM announced they would improve workplace diversity and support educational facilities. The firm provides financial support to a project in the London Borough of Haringey called Chrysalis East Chrysalis East, aimed at maximising the educational outcomes of children, many of whom are from an ethnic minority background. RCM also worked with Amos Bursary, which provides support from the age of 16 until the time of leaving university to young men and women of African and Caribbean descent from schools all over London. [21] [22]

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References

  1. ↑ "Chris Rokos's Hedge Fund Soars a Record 51% in Turn of Fortunes". www.bloomberg.com. Retrieved 6 January 2023.
  2. ↑ "Rokos Capital Management". www.rokoscapital.com. Retrieved 25 July 2022.
  3. ↑ "register.fca.org.uk". register.fca.org.uk. Retrieved 25 July 2022.
  4. ↑ "Rokos Capital Management". www.rokoscapital.com. Retrieved 6 February 2020.
  5. ↑ "Billionaire Rokos Tightens Reins at $9 Billion Hedge Fund". www.bloomberg.com. Retrieved 6 February 2020.
  6. ↑ "Trader Rokos restructures firm in bid to improve performance". www.ft.com. Retrieved 25 July 2022.
  7. ↑ "Trader Rokos restructures firm in bid to improve performance". www.ft.com. Retrieved 25 July 2022.
  8. ↑ "Rokos hedge fund made £900m profit in early days of pandemic". www.ft.com. Retrieved 25 July 2022.
  9. ↑ "Rokos Hedge Fund Said to Gain 20% in First Full Trading Year". www.bloomberg.com/news/. Retrieved 25 July 2022.
  10. ↑ "Billionaire Chris Rokos Is Seeking $900 Million for New Hires". www.bloomberg.com/news/. Retrieved 25 July 2022.
  11. ↑ "Hedge fund trader Chris Rokos pips former firm Brevan Howard". www.ft.com. Retrieved 25 July 2020.
  12. ↑ "Chris Rokos's Macro Hedge Fund Surges 44% in Best Year Ever". www.bloomberg.com. Retrieved 25 July 2020.
  13. ↑ "Macro hedge funds find 2021 has not gone to script". www.ft.com. Retrieved 25 July 2020.
  14. ↑ "Rokos's Hedge Fund Raises $1 Billion After Record Annual Loss". www.bloomberg.com/news/. Retrieved 25 July 2020.
  15. ↑ "Rokos's Hedge Fund Raises $1 Billion After Record Annual Loss". www.bloomberg.com/news/. Retrieved 25 July 2020.
  16. ↑ "Rokos's Investors Sign Up for a Wild Hedge Fund Ride". www.bloomberg.com. Retrieved 25 July 2020.
  17. ↑ "Rokos's Investors Sign Up for a Wild Hedge Fund Ride". www.bloomberg.com. Retrieved 25 July 2020.
  18. ↑ "Hedge funds scoop big returns from global interest-rate shake-up". www.ft.com. Retrieved 25 July 2022.
  19. ↑ "Haidar, Odey Lead Hedge Funds' Surge With Triple Digit Gains". www.bloomberg.com/news/. Retrieved 25 July 2022.
  20. ↑ "Chris Rokos's Hedge Fund Soars a Record 51% in Turn of Fortunes". www.bloomberg.com. Retrieved 6 January 2023.
  21. ↑ "Secretive Billionaire Hedge Fund Firm Pledges Money to Fight Racial Injustice". www.bloomberg.com/news/. Retrieved 25 July 2022.
  22. ↑ "Black Lives Matter". www.rokoscapital.com. Retrieved 25 July 2022.
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