John Brynjolfsson, formerly a top manager at PIMCO and a widely followed commentator on inflation trends in the U.S. markets, has quietly launched his own hedge fund strategy in recent months. Brynjolfsson left PIMCO in 2008 and started his new Armored Wolf Alpha fund in February, initially with internal money. In March, he added friends and family money and then opened up the vehicle to other investors. It now has $50 million in assets under management.
Brynjolfsson is probably best known for his pioneering work back in the 1990s on Treasury Inflation-Protected Securities and then for going on to launch and build the Real Return platform at PIMCO—where he was manager of the firm’s second, third and fourth largest public funds. At PIMCO, he ran huge portfolios of some $45 billion in public funds, as well as an additional $35 billion in managed accounts, including some with much more unconstrained mandates similar to hedge funds.
Armored Wolf’s macro backdrop focuses on secular trends in global inflation over three to five years and what the team called super-secular trends (five years and more) that will define the global investment landscape in the more distant future. The team’s strategies focus on tactically managing real assets and emerging markets that they believe will continue to deliver compelling risk-adjusted returns in this new global investment landscape.
The team has been deploying risk cautiously since the fund’s launch, only recently having ramped up to a near full deployment of their risk budget. As a result, returns have been muted but steady—up 1.6% from inception through the end of August.
However, Brynjolfsson has big plans for Armored Wolf, which is based in Aliso Viejo, Calif. He has already put together a team of 18 people in total, including co-founder Ronald Solberg, an emerging markets specialist who worked previously at PIMCO as head of emerging markets research and strategy, as well as at Tokyo Mitsubishi International in London and at Chase Securities in Hong Kong. The chief executive is Alan Andreini, who has some 35 years of experience in financial markets, including a spell in a similar role at Money Management Group, which he built up from assets of approximately $50 million to well over $1 billion.
--Neil Wilson
