Key Takeaways
- • Macro hedge funds suffered consecutive losses in September 2026 following the Federal Reserve's first rate increase since 2023 and subsequent blow-ups in French carry trades, creating a brutal environment for the sector.
- • Taula Capital Management confirmed a 9.4% loss in September, with unconfirmed reports suggesting other major macro funds at firms like Balyasny Asset Management and Citadel also took significant hits on French bond trades.
- • Select individual portfolio managers are reportedly thriving despite sector-wide distress: Lewis Morton (formerly Eisler Capital) is said to be up nearly $20 million year-to-date, while Josh Blakely (ex-Millennium), James Watson (Barclays' former head of euroswaps), and Andrew Bound (ex-Goldman Sachs rates trader) are purportedly performing well.
- • Macro portfolio managers with substantial losses face extended recovery periods, as losses carry forward to the next year before bonuses can be paid—a dynamic that often drives talent migration to newly launched funds with clean slates.
- • The divergence between struggling macro funds and individual performers suggests that macro investing skill and tactical positioning have become highly differentiated, with some traders capitalizing on market dislocations while others absorb major losses.
Summary
Macro hedge fund managers have endured an exceptionally difficult period in recent weeks, with the sector sustaining losses across two distinct market-disrupting events. Following the Federal Reserve's first interest rate increase since 2023 in mid-September, macro-focused funds posted losses; conditions deteriorated further when carry trades tied to French bonds unraveled, inflicting additional damage on the industry. Bloomberg reported the compounding nature of these losses, though most funds have declined to disclose specific performance figures.
Taula Capital Management stands as the only macro fund to confirm concrete losses, posting a 9.4% decline in September prior to the French carry trade deterioration. However, the broader sector's performance appears more dire, with unconfirmed reports suggesting major losses across several prominent firms. At Balyasny Asset Management, the fund reportedly lost money on French bond trades, though James Watson, the former head of euroswaps trading at Barclays, is understood to be performing well personally. Similarly, portfolio managers at other major institutions including Citadel, Millennium, and Eisler Capital are reportedly navigating the downturn with mixed results.
Despite the sector's struggles, certain individual portfolio managers are reportedly posting strong returns. Lewis Morton, a former star portfolio manager at Eisler Capital now at Taula, is suggested to be up nearly $20 million this year. Josh Blakely, who transitioned from Millennium, and Andrew Bound, an ex-Goldman Sachs managing director and rates trader now at Citadel, are also said to be performing well. None of these individuals or their firms have confirmed these figures.
The extended nature of losses in macro funds creates structural challenges for the sector. Macro traders who book significant losses must carry those losses forward into the following year before becoming eligible for bonus compensation—a dynamic that can also impact base salaries at certain firms where compensation is treated as an advance against profits. This mechanism typically triggers talent migration as underperforming portfolio managers seek positions at newly established funds offering clean slate arrangements and unfettered bonus opportunities.
Taula Capital Management stands as the only macro fund to confirm concrete losses, posting a 9.4% decline in September prior to the French carry trade deterioration. However, the broader sector's performance appears more dire, with unconfirmed reports suggesting major losses across several prominent firms. At Balyasny Asset Management, the fund reportedly lost money on French bond trades, though James Watson, the former head of euroswaps trading at Barclays, is understood to be performing well personally. Similarly, portfolio managers at other major institutions including Citadel, Millennium, and Eisler Capital are reportedly navigating the downturn with mixed results.
Despite the sector's struggles, certain individual portfolio managers are reportedly posting strong returns. Lewis Morton, a former star portfolio manager at Eisler Capital now at Taula, is suggested to be up nearly $20 million this year. Josh Blakely, who transitioned from Millennium, and Andrew Bound, an ex-Goldman Sachs managing director and rates trader now at Citadel, are also said to be performing well. None of these individuals or their firms have confirmed these figures.
The extended nature of losses in macro funds creates structural challenges for the sector. Macro traders who book significant losses must carry those losses forward into the following year before becoming eligible for bonus compensation—a dynamic that can also impact base salaries at certain firms where compensation is treated as an advance against profits. This mechanism typically triggers talent migration as underperforming portfolio managers seek positions at newly established funds offering clean slate arrangements and unfettered bonus opportunities.
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