Veteran hedge fund manager John Taylor describes one of his favourite Gary Larson cartoons, where one vulture sitting on an animal carcass says to another as more descend: "good friends flying in from all over...this is the best of times".
There is, he says jokingly, a resemblance to the hedge funds currently circling foreign exchange markets, where a sudden rise in volatility offers to boost returns for the few specialist investors who survived the decade-long period of calm that forced many from the sector.
Taylor's former firm, FX Concepts, rode the financial crisis market volatility to its best year in 2008, when assets under management ballooned to over $14 billion, making it the largest currency hedge fund in the world at the time.
But a post-crisis wash of central bank quantitative easing and developed-world interest rates barely above zero sapped the near $7 trillion-a-day global currency markets of the kind of flows that hedge funds thrive on.
More about:
