Research from LCH Investments, published at the end of last month, makes it clear that getting the big macro calls right is the key to performance.
Top of the tree in 2011 was Ray Dalio’s Pure Alpha fund, which made $13.8 billion for its investors. Dalio, you might recall, was one of the first to recognize that the credit crunch would turn into a great deleveraging.
If it’s the big picture that counts, then we had to be impressed by the global economic analysis by one investor responsible for several hundred billion dollars in assets. It went like this:
"Europe’s like a 70-year-old who’s had a good life but now has terminal cancer and wants to enjoy his final days in as little pain as possible; China’s the 21-year-old go-getter, who believes he can achieve anything; and the US is a 35-year-old, who used to be just like the 21-year-old, but is now out of shape and can’t decide if he can be bothered to get fit again."
Surely this fund manager could not have been referring to John Paulson, whose fund was the star at the start of the financial crisis but returned a loss of $9.6 billion last year?