Element Capital Surged 25% This Year on Bond Rout

(Bloomberg) -- Jeffrey Talpins’s Element Capital Management posted gains of more than 25 percent in the first nine months of this year as its bets on rising interest rates in the U.S. continue to pay off.

The $17.5 billion macro hedge fund rallied 2.7 percent in September in large part due to its position that U.S. Treasuries would tumble, according to a person familiar with the fund. Talpins is making the wager by being long options. A representative for the New York-based firm declined to comment.

The yield on benchmark 10-year Treasuries reached about 3.16 percent Wednesday, the highest since 2011, amid gains in stocks and strong economic data.

Talpins is trouncing other macro managers this year. Louis Bacon’s Moore Global Investments fund is down 1.8 percent this year through Sept. 13, and the multi-manager Moore Macro Managers has climbed 1.6 percent in the same period.

Brevan Howard Asset Management, which is staging a comeback after years of mediocre performance, has returned 10.3 percent this year through September in the Brevan Howard Master Fund as bouts of volatility and the prospect of higher interest rates create trading opportunities around the world.

--With assistance from Katherine Greifeld.

To contact the reporters on this story: Katherine Burton in New York at kburton@bloomberg.net;Nishant Kumar in London at nkumar173@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella, Vincent Bielski

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