2025 Global Alts New York: Graham Capital’s Kenneth Tropin – Why Macro Interest Has Quadrupled Recently

At the 2025 Global Alts New York Conference, Kenneth Tropin, Chairman & Founder of Graham Capital Management, joined NEPC’s Kadmiel Onodje for a wide-ranging fireside chat. Tropin reflected on Graham’s 30-year evolution in macro and quant strategies, current market opportunities and risks, how AI is shaping quant investing, and the firm’s distinctive culture.

Also see 2025 Sohn NY Conference: Einhorn, Steve Cohen, Citrone, Chanos, Glenview [170 Page PDF Report]

2025 Global Alts New York - Graham Capital Management's Kenneth Tropin

Graham Capital Management's Approach and Relationships

Kenneth Tropin describes Graham Capital Management's relationship with its investors as a close partnership spanning over 30 years, emphasizing that they view investors as "partners," not just clients. He humorously notes that while they've "given [investors] a couple reasons to leave over the years," their initial five clients from 1994 are still invested with the firm today.

Current Market Environment and Interest in Macro

There's been a significant surge of interest in macro strategies recently, with Graham Capital Management having "three or four times as many client meetings" in the last couple of years compared to five years ago.

This increased interest is driven by several factors:

• Fixed Income: The fixed income market is significantly more active. Between 2009 and 2021 (post-GFC), the ECB, Fed, and Bank of England collectively made only 13 25-basis-point rate moves over 11 years. In stark contrast, the subsequent 36 months have seen 60 such moves, making the opportunity set for fixed income traders "something like 20 times more interesting".
• Equities: Equity valuations are currently at "record highs" and are considered "very stretched," with many potential factors that could "upset the apple cart".
• Geopolitics: The global geopolitical situation is described as the "most unstable ever".
• Bonds: Bonds, typically a diversifier, are perceived as "scary" due to the "biggest deficit it's ever been" with "no easy way to understand how to manage it lower" or "no obvious effort being made to do so".
• Overall Market Dynamic: With "stocks are really expensive and bonds are kind of scary," investors are increasingly looking to macro strategies because they are "not at all correlated to stocks and bonds," which "makes a lot of sense" for allocation.

Diversifying Benefits of Macro Strategies

While Graham's macro strategies generally perform well during periods when stocks and bonds are struggling, such as in 1987, 2003 (when the tech bubble burst), and 2008, there is "no guarantee" they will always make money when markets are down. They aim to provide a return profile that is "not acting exactly the same as the rest of the portfolio".