The shakeout in emerging markets may have claimed the scalp of one of Wall Street's most successful investors.
The Wall Street Journal reported on Saturday that Michael Novogratz recently decamped from Fortress Investment Group and shuttered his macro hedge fund amid turmoil in Brazil. According to the publication, Novogratz lost about $100 million in the last two months alone, and came on the heels of a $150 million bath the fund took on a wrong bet placed on the Swiss franc.
At Fortress, Novogratz oversaw approximately $2 billion in assets that included $1 billion in the macro fund. Novogratz, The Journal wrote, attempted to right the ship after the fund was hammered by the franc. Instead, he compounded those losses by stacking up on positions that assumed Brazilian interest rates would fall.
When the bet went the other way, and faced with the prospect of client redemptions, Novogratz cut his losses and vacated his position, the publication added. Other Fortress executives agreed with the decision, according to the report.
Citing a regulatory filing, The Journal added that the latest losses left the fund down 17.5 percent for the year through last month. A Fortress representative contacted by CNBC did not immediately return a request for comment.
Recently, investors have fled Brazil — one of the emerging market's seemingly surest bets and a draw for global capital. A multi-pronged political scandal has touched off wrangling that may result in the impeachment of Brazilian president Dilma Rouseff,
Fortress, however, is far from being the only large investor wrongfooted by a tumultuous global market.