Currency hedge fund liquidates

A foreign exchange hedge fund managed by Avinash Persaud, a noted academic and currency expert, has gone into liquidation.

The Global Asset Management Persaud Global Currency fund closed because of a combination of disappointing performance and a large redemption, he said. The fund had posted a 12.7-percent loss since its launch in December 2003.

Persaud says momentum-driven hedge funds struggled for much of 2004 as the dollar’s downtrend temporarily halted and the greenback entered a range-bound environment. The funds won a temporary reprieve as the dollar renewed its slide in the fourth quarter of 2004, enabling the sector to recoup most of its losses. However, funds that started this year betting on a continued dollar sell-off were caught off guard by the currency’s rebound, he adds.

Persaud was chairman of financial advisory firms Intelligence Capital and Elara Capital Advisors, and investment director of Global Asset Management (GAM). He was also professor of commerce at Gresham College and global head of research for State Street Global Markets, a large provider of financial services to institutional investors. The Persaud Global Currency fund was the only fund he managed directly, but he advises several other GAM funds.

According to industry data, the average currency hedge fund lost 1.3 percent in 2004 and has dropped an additional 1.7 percent in the first half of 2005.