More hedge funds are being hit by the recent turmoil in the market.
Traders believe that the pain that has plagued top-hedge funds Melvin Capital Management and Maplelane Capital over the past few days is spreading, as an increasing number of stocks with significant short-term pushes, and because funds that handle losses, their exposure to the stock market on long and short sides of their portfolios.
This means that funds hurt, even if previously profitable bets on companies as stock prices fall.
Candlestick Capital Management, a hedge fund in Greenwich, Conn., Founded by former Citadel portfolio manager Jack Woodruff, was a person familiar with the Citadel portfolio in the low to mid-teens during the year to Wednesday. fund. It was in 2020, the first year, by 26% higher.
D1 Capital Partners, a top-performing fund set up by former Viking Global chief investment officer Dan Sundheim in the past year, fell by about 20% during the year to Wednesday. The substantial portfolio of investments in private companies buffered the fund through a larger loss. D1 managed $ 20 billion at the beginning of the year.
Steven A. Cohen’s Point72 Asset Management, which together with Citadel and its partners injected $ 2.5 billion in emergency financing into Melvin on Monday, declined by about 10% earlier this week and suffered losses on Tuesday and Wednesday, saying people are familiar is with the case. .
Bloomberg News was the first to report the performances of D1 Capital and Point72.
Some funds that have suffered serious losses are looking for inflows of cash to stabilize their businesses.
Maplelane, which started the year with about $ 3.5 billion and was down about 30% for the year to Tuesday, incurred additional losses that dropped the year to Wednesday by about 45%, say people familiar with with the fund. One of the people said the losses on Wednesday stemmed from the disruption or reduction in exposure to the stock market. This included reducing position sizes and leaving names to limit losses.
Maplelane is a low-profile hedge fund that has rarely been marketed to investors in the past. But people familiar with the fund have argued that it should raise between $ 300 million and $ 500 million from potential clients.
The losses come during a period of frenetic trading, with shares of companies like GameStop Corp.
and AMC Entertainment Holdings Inc.
wild shoot higher. Individual investors achieved the victory due to the violent movements not determined by the underlying principles of companies. The rising prices led clumsy investors to buy back shares they sold to reduce their losses, which caused the stock to rise even higher.
Write to Juliet Chung by [email protected]
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