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VIX Virus Allegedly Claims Rising Hedge Fund Star

VIX Virus Allegedly Claims Rising Hedge Fund Star

A source close to Hutchin Hill says Ahmad is “a trader I liken to [SAC’s] Steve Cohen in terms of talent. He’s fast and registers changes quickly. His P&L is hundreds of small wins.” Some of those wins this year were trades in credit and macro strategy.

That’s what Fortune wrote back in 2011 about Shahraab Ahmad.

Cohen comparison jokes – of which there are obviously many – aside, it looks like Ahmad might have found himself on the wrong side of the short vol. trade. And “bigly.”

A JPMorgan veteran, Ahmad left Hutchin Hill back in 2013, unwinding his $150 million book with designs on “retiring“. But like Michael Corleone, he was “pulled back in” and eventually launched Decca Fund in April 2015.

As far as I can tell, that was going pretty goddamn well there for a while. He runs Decca at City Financial ($3.3 billion AUM) and it had apparently grown to $700 million by last year. Here’s a fun headline from Bloomberg ca. April 2017:

  • CREDIT HEDGE FUND DECCA’S ASSETS JUMPED 1,300% IN TWO YEARS

Returns during those two years (2016 and 2015) were 20% and 15%, respectively, according to a letter seen by Bloomberg.

That same letter suggests that Decca returned just over 4% last year and I imagine things were probably proceeding apace in 2018, right up until last week or, as last week has come to be known, “Vol-pocalypse’.

According to the ubiquitous “people familiar with the matter” who spoke to Bloomberg, Decca lost 25% of its value during the week “after its bets against volatile markets backfired.”

What they were doing over there is anyone’s guess – Bloomberg just says Decca “had built up large short-volatility bets and lost as they unraveled.”

I’m going to go ahead and assume Ahmad wasn’t simply in with Seth Golden on XIV and SVXY, but given that the vol. spike was largely an equities phenomenon, one wonders how he could have possibly lost that much on credit bets.

In any event, it looks like ol’ Shahraab might have just landed himself at the top of the list in terms of biggest known losses during last week’s mayhem. As Bloomberg goes on to point out, most of what’s been reported thus far has centered around the hit taken by CTAs.

The same sources told Bloomberg that “the fund recouped some of its losses this week.” Who knows, maybe Ahmad piled into SVXY last Thursday and rode that fucker up as the panic subsided (I’m just kidding – I hope).

Whatever the case, this looks like proof that the trend followers and the Target managers weren’t the only ones who suffered during the mini-panic.

Maybe Seth Golden should send his CV to Decca – it sounds like he’d be a good fit.

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