Discovery Capital's Macro Fund Soars 48% in 2023 After Recovery from Losses

Discovery Capital Management, the hedge fund firm led by Rob Citrone, a prominent 'Tiger cub', achieved impressive returns in 2023, with its macro hedge fund delivering a 48% gain. This performance placed it among the top hedge funds focused on economic trends, according to a Bloomberg report.

Sources familiar with the fund's performance revealed that Discovery Capital's success was largely driven by profitable long positions in Latin American equities and sovereign bonds, as well as US credit. Additionally, the fund benefitted from both long and short bets on financial stocks, which contributed significantly to its strong results.

This remarkable recovery comes after a challenging 2022, during which the fund experienced a steep loss of 29%. Discovery’s 2023 return contrasts sharply with the broader macro hedge fund sector, which saw mixed results. According to Bloomberg data, macro funds had an average decline of 0.4% as of November 2023, reflecting the volatile market conditions caused by aggressive interest rate hikes from central banks aimed at curbing inflation.

Despite the volatility in global markets, Discovery Capital’s strategic positions in key sectors and its ability to navigate turbulent financial conditions allowed it to achieve one of the best performances in the industry for the year.