- Neal Berger’s hedge fund returned 163% in 2022 betting on the end of the easy money era, according to a Bloomberg report.
- A veteran trader, Berger is betting on a continued bear market.
- Berger said more pain is still to come for global markets and everything will continue to decline.
Caroline Ellison is a math whiz, trader, and the shadow figure behind FTX’s collapse — here’s how a devout Harry Potter fan came to take part in crypto’s biggest implosion
Ellison grew up in the suburbs of Boston.
Her father, Glenn Ellison, is the department head of economics at Massachusetts Institute of Technology and her mother, Sara Fisher Ellison, is a senior lecturer in economics at MIT. Growing up, Ellison and her two sisters “definitely got exposed to a lot of economics,” she told Forbes in an interview.
Ellison, who attended Newton North High School, had a special aptitude for mathematics. She said that she and her siblings “did a bunch of math competitions,” which she “loved.” “I just loved the math team community,” Ellison said.
“I’ve been into math since I was probably a little kid,” she said on an episode of FTX’s podcast in 2020, adding that she’s been “thinking about it a lot from an early age.”
When she was eight years old, Ellison reportedly wrote her father an economics paper analyzing stuffed animal prices at Toys ‘R’ Us.
Ellison said she “worked pretty hard” in high school. In 2012, she enrolled at Stanford University, where she studied mathematics. Ellison said she picked the college because she wanted to get away from Boston and “try something different.” She told Tristan Yver on the FTX Podcast that she really enjoyed her time at Stanford and had fun living in a dorm. “College is a great time,” Ellison said, adding that “you don’t really have any responsibilities.”
Ruth Ackerman, a math professor who taught Ellison, described her former student to Forbes as “bright, focused, very mathy.” Ellison said that she had contemplated studying linguistics or political science when she was a freshman, but opted for math because there were more opportunities to do other classes on the side. She said that in hindsight she wished she did more computer science and programming when she was at Stanford, but that a math major was a “signal that you’re smart.”
Like her future colleague Bankman-Fried, Ellison began exploring effective altruism in college. It’s a philosophical movement that uses calculations to understand how people can use their time, money, and resources to best help others. She eventually joined Stanford’s Effective Altruism Club.
Ellison said in a podcast that when she was in junior year, “I didn’t really know what to do with my life.” She got multiple offers from trading firms for internships and chose to do one at Jane Street, which she said was “incredibly stressful.”
Ellison said that she had planned to study for a fifth year at Stanford and do a masters, but ultimately decided against this and accepted a return offer from Jane Street instead. She worked there for around 18 months as a trader on its equities desk. “I loved it,” she told Tristan Yver on the FTX Podcast. At Jane Street she met Bankman-Fried, and the two supposedly bonded over their interest in effective altruism.
By 2018, Bankman-Fried, also known as SBF, had launched a crypto trading firm called Alameda Research. Ellison said that she went for a coffee with Bankman-Fried when she was visiting the Bay Area, and he persuaded her to join him. “This was very much like, ‘oh, yeah, we don’t really know what we’re doing,'” Ellison told Forbes of her initial impressions of Alameda. But she decided that it ultimately “seemed like too cool an opportunity to pass up,” she told Tristan Yver on the FTX Podcast.
Aside from Ellison, the Alameda Research crew included SBF’s close friends Nishad Singh, Gary Wang, and Sam Trabucco. They moved from Berkeley to Hong Kong in 2018 where they lived like college students and fiercely traded crypto. Ellison was the only female on the team. While the others played video games, she’d be watching the royal wedding of Prince Harry and Meghan Markle.
The switch from Jane Street to Alameda was a challenge, Ellison said on the FTX Podcast. “I wanted to be an expert on everything, but there was still lots of stuff in the crypto world that I knew nothing about,” she said, adding that she “had to learn a whole new set of intuitions.”
Ellison said that she found Alameda a “super challenging environment” and acknowledged that she spent a lot of time at work but said that it was “a lot of fun.” Work “gives her a sense of purpose,” she said, though she noted that her ultimate goal was “maximizing” her impact by earning money to give it away to charity.
After SBF established FTX in 2019, Ellison began taking more responsibility at Alameda Research. Ellison and Trabucco took over from Bankman-Fried as co-CEOs of Alameda in late 2021. The duo were featured in Forbes’ 30 Under 30 in 2022.
However, Bankman-Fried “remained the ultimate decision-maker” at Alameda, directing investment and operational decisions, the Securities and Exchange Commission has said. “Though Ellison made some trading decisions, she frequently consulted with Bankman-Fried, particularly about strategic issues and significant trades,” the regulator said.
Ellison maintained an active online persona. She tweeted under the handle @carolinecapital. She supposedly had two Tumblr accounts — worldoptimization and worldoptimization-lifeadvice — according to Gawker.
Still, Ellison largely remained out of the limelight as FTX rose to fame. FTX employees told Forbes that Ellison was content staying behind the scenes.
In April, Trabucco stepped down as CEO. After that, Ellison ran Alameda on her own.
Now, amid the fallout of FTX, online investigators ranging from the Twitter account @Autismcapital to media outlets like Gawker have rushed to unearth information on Ellison.
CoinDesk, the crypto publication, reported through anonymous sourcing, that Ellison was among the 10-person crew of FTX and Alameda employees who all lived together in the Bahamas. CoinDesk noted that all 10 members were paired off in relationships with one another at some point. Ellison reportedly had an on-and-off relationship with SBF.
On what is assumed to be her Tumblr account, Ellison likened the polyamory in the Bahamas house to an “imperial Chinese harem.” She supposedly noted that there was an established hierarchy and everyone knew where they fell within it.
Ellison along with the other housemates reportedly shared a therapist named George Lerner.
Ellison is a reader and often posted book reviews on her Tumblr. The most recent titles she reviewed include “The Golden Enclaves” by Naomi Novik and “Venomous Lumpsucker” by Ned Beuman.
But her literary tastes range far and wide, from the Harry Potter series…
…to the Substack of Matthew Yglesias, a blogger who writes about economics and politics. Ellison said on the FTX Podcast that her parents read the first Harry Potter aloud to her when she was just three, and that she read the second book by herself age five. She also writes LARPS – live action role play – and said that she planned to work on a novel when she’s not working at Alameda anymore or is taking a long vacation.
As of 2021, her favorite color was gray.
She often talks about her relationship as being a “trad,” which can be understood as one who adheres to conventional gender roles and traditions. Ellison contended on her Tumblr that over time, she’s moved away from being a “trad” to becoming “a bit more agnostic on culture/society.”
The late Supreme Court Justice Antonin Scalia reportedly lived in her former home.
Ellison’s online presence — including her LinkedIn — has dwindled since FTX’s collapse. She last posted online on November 8. While Bankman-Fried has done a round of media appearances, including speaking at The New York Times’ DealBook Summit, Ellison has remained silent.
Ellison pleaded guilty to seven charges in the collapse of FTX, including fraud, according to her plea agreement with the Southern District of New York filed on December 18. She faces up to 110 years in jail, but has struck a plea deal with the Department of Justice and is cooperating with authorities.
Veteran trader Neal Berger is betting that global assets are going to feel more pain, after scoring a massive gain last year when stocks had their worst performance since 2008.
According to a Bloomberg report, he ran Eagle’s View Capital Management as a fund of funds for 16 years before launching the Contrarian Macro Fund, which in April 2021 piled up bets on an increasingly hawkish Federal Reserve. The new fund delivered a return of about 163% in 2022.
“The reason why I started the fund was that central bank flows were going to change 180 degrees. That key difference would be a headwind on all asset prices,” he told Bloomberg. “One had to believe that the prices we saw were, to use the academic term, wackadoodle.”
Per the report, Eagle’s View has about $700 million in assets under management, and roughly $200 million in the Contrarian Macro Fund.
The turbulence of the previous year brought losses for many money managers, but Berger found the opposite. He told Bloomberg he’s shorting stocks and bonds with futures contracts, targeting assets he believes have been skewed by easy money policies.
In particular, his Contrarian Macro Fund is mostly betting against Europen and American assets, though it also has hedges that will pay returns in upswings.
“The $19 trillion of sovereign debt trading at negative yields, the SPAC boom, the crypto boom, private equity valuations and public equity valuations — they’re all stripes of the same zebra,” he explained. “The zebra being the ocean of liquidity, first in response to the Great Financial Crisis and then to Covid.”
After the Bank of Japan took the surprisingly hawkish step last month to widen the trading range of 10-year bond yields, Berger added bets against Japanese bonds.
He anticipates maintaining his short positions for years and predicted pain in the stock market won’t become evident until markets go sideways for months.
“Big picture, everything is going down,” Berger said. “Price action is ultimately the bible.”