January 26, 2022

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Citadel Gains 1.2%, Gelband’s Firm Falls: Hedge Fund Update

(Bloomberg) — The $3 trillion hedge fund industry is under pressure amid market turmoil prompted by the spread of the coronavirus.

A wide dispersion of gains and losses is expected to emerge as firms disclose their returns for March. Below are some of the winners and losers.

Key Developments:

Ken Griffin’s flagship hedge fund gained 1.2% in March, bringing year-to-date returns to almost 6%Dan Loeb’s Third Point fell 11% in March, bringing 2020 losses to 16%Funds managed by Diego Parrilla and Said Haidar surged in MarchDmitry Balyasny’s $6 billion firm gained 3.7% in MarchEquity-focused hedge fund giants Viking and Coatue fall in MarchCarrhae, Pinpoint, Kuvari defy rout; Sylebra loses in monthEinhorn’s funds fall 12% in March with market plunge taking toll

Citadel Leads Multi-Strategy Gains for 2020

Ken Griffin’s flagship hedge funds at Citadel made money last month, extending returns to almost 6% for the first quarter of the year, according to a person with knowledge of the matter.

The Kensington and Wellington funds gained 1.2% in March, said the person, who asked not to be identified because the matter is private. All five of the strategies that feed into them were flat or positive over the period, said the person. Those funds are mostly market-neutral, which means bullish wagers are offset by bearish ones.

Citadel had been among firms that were struggling in the first half of March as the coronavirus pandemic virtually halted the global economy and seized up markets from stocks to bonds to commodities.

Wellington had been down 5.3% through March 20 before things turned around, Bloomberg reported. Then, the unprecedented moves by the Federal Reserve and the promise of a $2 trillion economic stimulus package boosted markets, giving funds a reprieve.

Meanwhile, the fixed-income heavy ExodusPoint Capital, run by Michael Gelband, fell about 0.7% last month, a person said. Still, the fund remains up for the year, at 1.2%.

Representatives for the firms declined to comment.

Dan Loeb’s Third Point Hedge Fund Falls 11% in March (3:02 p.m. New York)

Dan Loeb’s Third Point posted losses in its flagship hedge fund last month, according to people with knowledge of the matter.

The Third Point Offshore Fund dropped 11%, bringing its loss this year to 16% percent, said the people, who asked not to be identified because the matter is private.

A spokeswoman for Third Point didn’t respond to requests seeking comment.

Separately, Renaissance Technologies’ Institutional Diversified Global Equities Fund, or RIDGE, fell 6.6% in March, extending losses for the year to 10%, people said. The fund follows a market-neutral strategy, meaning its bets on rising shares are matched by wagers on falling stocks.

A spokesman for the firm declined to comment.

Managers Who Warned Against Buying the Dip Surge in March (2:20 p.m. New York)

Macro hedge funds managed by Diego Parrilla and Said Haidar, both of whom warned investors against buying the dip last month, surged in March, defying a global market rout.

Parrilla’s Quadriga Igneo fund advanced 19.1% in March, boosting first-quarter gains to 42.5%, the money manager said by email. Haidar’s Jupiter Fund surged an estimated 23.4% in March, leaving the fund up 51.2% during the first three months of the year, according to a letter to investors seen by Bloomberg.

Parrilla had termed a rise in shares on March 2 a potential trap. Haidar said that buying the dip might not work this time around. Stocks ended their historic bull run last month with the S&P 500 falling 12.5%, its worst monthly performance since October 2008.

The rising value of gold and devaluation of China’s currency “will be key themes ahead, as inflation and monetary and fiscal policies without limits become a global financial pandemic,” said Parrilla, managing partner of Quadriga Asset Managers.

A representative of Haidar Capital Management declined to comment.

Balyasny Hedge Fund Gains Almost 4% in March (5:19 p.m. London)

Dmitry Balyasny’s $6 billion Balyasny Asset Management beat peers by making money in March.

The firm’s flagship hedge fund gained 3.7% last month, bringing year-to-date gains to almost 5%, according to people familiar with the matter.

Balyasny succeeded in areas including equities and macro trading, one of the people said. Health care and telecom, media and technology wagers were especially profitable for the firm in March. Looking forward, Balyasny sees opportunities in risk arbitrage — a strategy that’s broadly been hammered amid concerns that some of the biggest deals could collapse or be renegotiated.

Some of Balyasny’s biggest multi-strategy competitors are trailing, people familiar said. Izzy Englander’s $40 billion Millennium Management fell about 0.2% in March, paring year-to-date gains to 0.7%. Steve Cohen’s Point72 Asset Management is little changed this year. The hedge fund had lost about 4% last month through March 20, before markets began rebounding, Bloomberg reported.

Representatives for the firms declined to comment.

Read more about how multi-strategy firms trimmed their losses.

Equity-Focused Viking, Coatue, Renaissance Suffer in March (11:15 a.m. New York)

Some of the industry’s biggest stock-focused funds took a hit last month as markets fell the most since 2008. Still, they are holding up better than the S&P 500 Index in this year’s rout.

Philippe Laffont’s hedge fund at Coatue Management sank 10% in March through the 27th, according to a person familiar with the matter, pushing losses for the year to about 6%.

Fellow “Tiger cub” Andreas Halvorsen, who runs $31 billion Viking Global Investors, fared better, falling 5% last month through Friday in its hedge fund, people said. It is down about 2% for the year.

Laffont and Halvorsen are so-called Tiger cubs because they’re alumni of Julian Robertson’s Tiger Management, which mostly wagered on and against equities. The S&P 500 tumbled 12.5% in March — the biggest monthly drop since the 2008 financial crisis — and plunged 20% in the first quarter, as markets were spooked by the rapidly spreading virus.

Jim Simons’s Renaissance Institutional Equities Fund, which is long-biased and designed to be a better-performing alternative to an index fund, ended March down 8%, extending year-to-date losses to 14.4%, another person said. The Renaissance Institutional Diversified Alpha Fund, which trades equities and derivatives, dropped 7.3% in March and is down about 10.5% for the year.

Representatives for the firms declined to comment.

Carrhae, Pinpoint, Kuvari Defy Rout; Sylebra Loses (7:19 a.m. New York)

Carrhae Capital’s long-short hedge fund, which manages about $300 million and runs money for investors including Blackstone Group Inc., gained 3% in March and was up 1% during the first quarter, according to a spokesperson.

Pinpoint Group’s multi-strategy master fund edged up an estimated 0.3% in March, taking this year’s return to 0.7%, according to an email from the Hong Kong-based firm. The $1 billion fund bets on rising and falling shares and credit markets and also uses macro and quant strategies to make money.

London-based Kuvari Partners’ long-short equity hedge fund advanced 2.3% last month, recovering some losses from earlier in the year. The fund, which manages $800 million, was down about 1.9% during the first quarter, according to a spokesperson.

A new hedge fund at Sylebra Capital lost 2.8% in March, according to a person with knowledge of the matter, who asked not to be identified because it’s private. The declines shrank gains at the about $300 fund to 5.5% this year. Hong Kong-based Sylebra oversees $2.2 billion in global technology-focused hedge funds and is led by Dan Gibson, a former partner at Coatue.

Einhorn’s Funds Fall 12% in March (7:26 a.m. Hong Kong)

David Einhorn’s hedge funds plummeted 12% in March as equity markets took their biggest dive since the 2008 financial crisis.

The declines left his Greenlight Capital with a loss of about 21.5% year-to-date, according to an investor update on Tuesday viewed by Bloomberg. The S&P 500 Index also dropped about 12% during the month, including reinvested dividends, as the accelerating spread of the coronavirus brought much of the global economy to a halt.

The 2020 slide comes at a challenging time for Einhorn, whose value style of investing has mostly been out of sync with markets in recent years. He’s still trying to climb out of a hole that started with a 20% loss in 2015. Einhorn posted his worst annual drop ever three years later, when his fund fell 34%.

Of his largest positions at the end of last year, aircraft lessor AerCap Holdings NV lost more than 50% in March. A short wager against Netflix Inc. also may have lost money for Einhorn, if he still has it on his books. Einhorn’s short on insurer Assured Guaranty Ltd. and a long position on gold may have made money if he still owns them.

A spokesman for New York-based Greenlight declined to comment on performance or current holdings.

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