Hedge fund Caxton takes a huge hit to profits and slashes top pay

The European division of hedge fund giant Caxton Associates, which has more than $16bn (£12bn) in assets under management, took a huge hit last year as profits fell more than 92 per cent from £95.8m to just £7.2m.

Mayfair-based Caxton Europe, which gives management advice to the Caxton International, CX Global Equities, CX Global Advantage, CX Global Opportunities and CX Macro funds, had said last year that it was lowering the management fee it charged.

This will have partly explained the drop in profits, as the entity also slashed the pay awarded to its highest paid member from £58.3m to a mere £4.3m. Andrew Law, a prominent Conservative donor, has been the chief executive of Caxton since its founder Bruce Kovner handed over the reins in 2011.

Read more: Hedge fund Winton Capital sees profits edge up, but outflows continue

But macro hedge fund strategies, such as those which Caxton Europe manages, struggled more broadly in 2017.

Macro strategies focus on general economic and political views and macroeconomic principles, and a number of unexpected events last year took their toll on funds like Caxton's. Firms such as Brevan Howard, Moore Capital and Rokos Capital have all struggled to outperform the average in recent years.

Meanwhile Cedar Rock Capital, whose long-term buy-and-hold strategy has led to its manager Andy Brown being compared to US investing titan Warren Buffet, had a better time.

The star manager granted himself a dividend of £43m, after pre-tax profits rose from £80.1m to £88.1m.

Read more: Ranked: Britain's richest hedge fund managers

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