Fortress Investment Group's Michael Novogratz is dropping the stock-picking strategy managed as a part of its macro fund.
The fund's stock positions lost about 1.4% in January, compounding losses from a bet against the Swiss franc, according to a letter sent to investors dated Feb. 17 and obtained by Bloomberg News. The fund fell 6.9% in the month, while the average hedge fund across strategies dropped 0.2%, according to data compiled by Bloomberg.
The decision to abandon a dedicated long/short equity program within the macro fund marks a change in tactics for Fortress' liquid hedge fund unit. The division, led by Mr. Novogratz, principal, director and chief investment officer of the macro fund, last year planned to set up a stand-alone equity business, a move that would render stock picking more important to the money manager.
The macro fund change doesn't mean Mr. Novogratz's unit, which oversaw $7.5 billion of the firm's $66 billion in assets as of Sept. 30, will get out of equity markets completely. In the letter, Mr. Novogratz said the firm likes long positions in European stocks and that Japanese corporate earnings could push risk assets higher.
Fortress's macro funds, which managed $3.3 billion as of Sept. 30, also invest in global fixed income, commodities, currency markets and those markets' related derivatives.
Gordon Runte, a Fortress spokesman, declined to comment on the firm's plans.
