Black Swans, Angry Hedge Funds, and How to Make a 3,612% Return

Mark Spitznagel is a master at generating buzz for his tail risk-protection business. From partnering with the man who coined the very term “Black Swan” to warning this January that we’re in “the greatest tinderbox-timebomb in financial history,” he makes sure Universa Investments is rarely far from the Wall Street spotlight.

But it’s the firm’s returns that really make headlines — and get the blood of some of the hedge-fund world’s biggest names boiling in the process.

This year Universa has done it again, prompting a backlash that hits at the heart of whether Black Swan insurance is worth ...