Are white-knuckle traders a dying breed in macro funds?

investmentnews.com:

Just a few years ago, Glen Point Capital co-founder Neil Phillips was celebrated as an aggressive but canny trader in the mold of one of his macro hedge fund’s main investors, George Soros.

As of last week, Phillips is a convicted felon.

Phillips, 53, was found guilty of commodities fraud on Oct. 25 after only a few hours of deliberation by a federal jury in New York that decided his $725 million in foreign-exchange trades on Dec. 26, 2017, constituted market manipulation. The verdict will likely serve as a caution to other traders making outsized bets in narrow markets.

But such traders are already increasingly scarce, with many macro funds, which bet on economic trends across a wide range of assets, relying more on algorithms and quantitative strategies than white-knuckle bets. Perhaps nowhere has that shift been more pronounced than in foreign exchange, the area in which Soros first rose to widespread fame with his 1992 bet against the British pound.

The FX market today is increasingly dominated by quant-driven, programmatic flows. To be sure, currency funds have still been able to deliver solid returns for investors. But as Bloomberg reported last year, the number of FX-specific funds has declined by nearly 80% since peaking in 2010, according to data provider BarclayHedge.

Phillips’s lawyers have already said they will challenge the verdict. “We continue to believe very strongly in Neil’s innocence,” defense lawyer Sean Hecker said last week. Phillips is scheduled to be sentenced on March 14. He faces a maximum of 10 years in prison, but is unlikely to get such a lengthy term.

The weeklong trial offered a unique window into the inner workings of a trader-driven macro fund which focused on 25 emerging markets and at