Mo Grimeh on Global Macro

Can you provide an overview of Global Macro at Point72? 

At Point72, Global Macro is a mosaic of strategies across fixed income. We trade foreign exchange, interest rates, government bonds, corporate bonds, futures, indices, and select commodity futures. We trade directional and relative value. And we do this across all time zones: U.S., Europe, Asia Pacific, developed markets, as well as emerging markets.

We have about 45 investment teams and each team typically consist of a portfolio manager and one or two analysts. We have teams based across the U.S. as well as globally in the EU and Asia.

What is your long-term goal for the business?

We’ve grown a lot since I joined in 2020 – more than tripling the number of investment teams. Moving forward, we aim to continue to grow opportunistically and mature into a steady business. To do that, it’s not just about hiring investment professionals; we also need to build the infrastructure to give those investors the tools and research to succeed at their jobs and manage risk. Our new COO of Global Macro, Ryan Day, will help coordinate infrastructure and technology capabilities across the business and enhance coverage models for our PMs and their teams.

What are some of the challenges in managing a global business? 

As the name indicates, everything in Global Macro is global and interconnected. For instance, a decision of a major central bank (like the Fed) or an important data release, can directly impact other markets including far away emerging markets bonds, corporate credit spreads, indices, volatility, and currencies.

I was in Australia in January and saw firsthand how difficult it was for someone based in Sydney to trade because of impacts from U.S. markets. Payroll figures were being released and the teams were up during U.S. market hours, and that was Saturday midnight local time. U.S., EU, and even other markets such as Chinese economic data tend to drive global markets, so a reading that’s different than consensus forecasts may have an impact globally. The best time zone is actually London, and Dubai to some extent, where you end up covering both Asia and U.S.

Why do you believe Point72 is a great place for a macro investor?

In my view, the unique and really nice thing about Point72 is we are truly ONE firm, and we don’t operate in silos. Our Global Macro teams have a lot of interaction and collaboration with their peers in the macro business, as well as with teams outside of macro including the Economist team, the Long/Short Equity business, and others across the firm. We aim to leverage all the resources we can get and offer anything we can to the rest of the firm.

For example, we have an internal chat room with over 200 investment professionals between all the different asset classes, and it’s interesting to watch the chat because sometimes what drives fixed income markets comes from equities, and sometimes what drives equities comes from Global Macro or specific geographies. It’s great to have experts in all these topics and countries who can share their thoughts, their views, and what they hear locally, and the entire firm can benefit from that.

Also, Point72 has an investor-centric and led culture. Steve still runs a book. And many of the firm’s leaders previously managed money as well. That allows our leadership to guide and mentor our investment professionals because they’ve been in their shoes before. They understand the nuances of the job and have the ability to evaluate PMs by the quality of their work and their process, and not simply by numbers.

Lastly, our firm has been around for over 30 years and we have experience operating through all market conditions.

How have macro businesses across the industry changed over the years?

The business has changed quite a bit. Ten to 15 years ago, most macro businesses were thematic and operated as generalists. Now, it’s much more specialized. We’ve evolved Global Macro at Point72 in that direction, similar to our approach in L/S Equities and other areas of our business. As mentioned earlier, we trade across asset classes and regions, and our PMs typically have extensive expertise and focus on specific sectors, countries, or even certain parts of the yield curve, among other strategies.

What qualities do you look for in an investor?

I think it comes down to having a good process and putting discipline over conviction. Sometimes people have a good process but tend to deviate, especially when they feel too confident. We believe it’s primarily about discipline and humility in the end. We look for professionals that are specialists in specific areas, good at managing downside risk, constantly questioning themselves, and are self-aware. We feel this gives the portfolio potential staying power in different market conditions, including sudden regime shifts.