Michael Novogratz had reminded investors that the hedge fund industry is Darwinian in nature way back in July. Three months on, the hedge fund titan is living the hard lesson of natural selection. It was reported today that Fortress Investment Group LLC plans to tell clients that in the coming days it would be liquidating Michael Novogratz’s macro business following almost two years of losses that has spurred an investor exodus in the recent past. It was also reported today Michael Novogratz would be leaving Fortress by the end of the year . It is imperative to state that Michael Novogratz ran the Fortress Macro Fund which managed closed to $2.3 billion as of June.
Many believe the decision to close its macro fund comes after two years of trailing peers mostly on the back wrong way trades sent investors fleeing. The Swiss Franc’s surge against the euro contributed to a decline of 7 percent in January. It was the Brazilian bets that hurt the fund most as it lost close to 17 percent last month. It is imperative to state that the fund is the highest profile casualty this year. Michael Novogratz was with the firm for close to 13 years.
Shares of Fortress Investment Group witnessed a huge rally during the trading session today. The stock surged by close to 8 percent on the back of 3 times the daily average volumes. The price action on the back of above average volumes is a clear indication of the shift of momentum towards the buy side. The stock currently trades below all important daily moving averages and has been in a strong downtrend since the beginning of the year. The relative strength index has given a buy signal on the back of the price volume action seen in today’s session.