Big hedge funds make gains, most slump in 2018 returns


Wall Street

Hedge fund investors are scratching their heads as 2018 returns file in.

Big-name funds such as Ray Dalio’s Bridgewater and Ken Griffin’s Citadel notched impressive returns for the year even though the broader industry fell 4 percent, according to data released by Hedge Fund Research Tuesday.

The industry’s weak return just managed to beat out the poor showing of stocks last year, in which the S&P 500 fell 4.4 percent thanks to a particularly volatile December.

It’s the first time hedgies beat the broader market since the financial crisis, with HFR President Ken Heinz calling December’s relative outperformance an “industry milestone.”

Despite the overall industry losses there were hedgie gains that likely would have delighted investors even in less volatile times.

Bridgewater popped a stunning 14.6 percent last year, while Citadel’s flagship Wellington fund was up 9 percent. Quant-focused Two Sigma saw two of its funds gain 11 percent and 14 percent, respectively. Renaissance Technologies saw one of its funds gain 8.5 percent, while Hudson Bay Capital, which manages $3 billion, gained 6.5 percent.

The stunning returns come as many were seeing bloodshed in the industry.

A list of 2018’s top 20 performing hedge funds — as surveyed by HSBC — saw the bottom four funds produced negative returns for the year, for example.

And some of the earliest reads on hedge fund returns were decidedly negative, with David Einhorn’s Greenlight Capital losing 34 percent and posting its worst loss ever while Dan Loeb’s Third Point shedding 11 percent.

Steve Cohen — back to managing outside money after a two-year ban — gained less than 1 percent for investors in his Point72 hedge fund, according to sources. And Bill Ackman, hoping to shake off three years of losses, ended the year down 0.7 percent.

None of the funds returned calls for comment.


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