Element Capital, one of the world’s biggest macro hedge funds, is responding to a recent string of poor returns, including a $1 billion loss during last month's stock market rally, by reducing its $12 billion asset base in a bid to improve performance, according to a report by the Financial Times.

Element Capital, one of the world’s biggest macro hedge funds, is responding to a recent string of poor returns, including a $1 billion loss during last month's stock market rally, by reducing its $12 billion asset base in a bid to improve performance, according to a report by the Financial Times.

The report cites unnamed sources as revealing that the New York-based firm, which was founded by Jeffrey Tailpins, chalked up a 9.6% loss in January, as equity markets rebounded on speculation that central banks would soon call a halt to interest rate rises.

Element reportedly believes it needs to be more nimble to respond effectively to market changes and is planning to relax its redemption terms allowing investors to exit its funds more easily as a result – the ultimate aim being a reduction in assets.

Element's big January loss follows two years of negative returns – its first ever annual losses – with the firm losing 8.9% in 2021 and 3.4% last year.