The firm launched its $50 million Yin fund in October to exploit a macro view.Late last year, conventional wisdom had it that inflation was inevitable. The Federal Reserve was in the midst of its second round of quantitative easing, or QE2, leading many investors to believe prices would rise along with the government’s attempt at economic stimulus. And if there was inflation, it followed, the Fed would likely raise interest rates to combat it.
Sabretooth Capital principals Erez Kalir and Craig Perry saw it differently. They believed the Fed would keep interest rates near zero longer than expected and that the market was mistakenly pricing in inflation. Kalir and Perry were so