Home Hedge Funds Hedge funds navigate choppy year to deliver double-digit gains -January 03, 2024...

Hedge funds navigate choppy year to deliver double-digit gains -January 03, 2024 at 03:49 pm EST


LONDON/NEW YORK (Reuters) -Many hedge funds were caught off guard by last year’s surge in bond yields and the performance of most of them lagged stock market indexes, but a handful achieved double-digit gains, some helped by strong technology shares.

Among technology focused funds boosted by seven tech-related stocks, SoMa Equity Partners beat the S&P 500 stock index and the Nasdaq Composite with a whopping 62% result, according to an investor update seen by Reuters.

Among the performance contributors were long positions in Meta Platforms Inc, Microsoft and Uber Technologies, besides some bets against luxury and travel companies.

Coatue Management, founded by Tiger cub Philippe Laffont, was up roughly 21.5% last year, a different source said on condition of anonymity because the person was not authorised to speak publicly. The firm did not immediately respond to a Reuters request for comments.

In the broader long/short equity strategy, Anson Funds’ Investments Master fund posted a 18.2% rise for the year, according to an investor document. Among its successful bets was the British homebuilder Vistry Group.

Large multi-strategy firms including Millennium Management and Citadel’s Wellington Fund surged passed bond markets with 10% and 15.3% returns, respectively, sources familiar with the matter said. Bloomberg reported those results earlier on Wednesday.

The firms declined to comment.

Not all multi-strategy firms were able to post double-digit results. Schonfeld Strategic Advisors’ Fundamental Equity fund ended 2023 up almost 5% for the year, while its flagship fund Strategic Partners rose 3%, sources familiar with the firm said. Schonfeld declined to comment.

Hedge funds in 2023 averaged a 5.7% return in the year through November, according to hedge fund research firm PivotalPath. Equities and credit-focused strategies were the best performers, while macro and managed futures lagged.

By contrast, the S&P 500 index rose over 20% last year.

Hedge funds also compete with bond market returns, which perked up in a late-2023 rally. Bloomberg’s U.S. Aggregate Bond Index has risen 4.88% for the same period.

The $62.3 billion Marshall Wace, co-founded by British financier Paul Marshall returned 7.69% in its Market Neutral Tops fund and 7.58% in its Global Opportunities fund, separate sources said. Its Eureka fund returned 4.62%, they said.

Results for managed futures and hedge funds trading systematic and active strategies based on macro economic events were largely mixed.

The $4 billion multi-strategy fund, Eisler Capital, posted a 9.8% positive result, said a source. The firm declined to comment.

Systematic strategies and particularly those trading trends in different asset classes had a choppy year.

British hedge fund firm Winton Capital, overseeing $10.3 billion, navigated a 5.60% positive result in its multi-strategy programme and a 10.1% rise at year-end in its Diversified Macro fund, said a source.

The $299 million Mulvaney Capital Management posted a 51.22% return, said a source, while the $680 million Metori Capital Management in Paris saw a negative 2.8% return (after fees) in its Amundi Metori Epsilon Global Trends fund, said an investor document seen by Reuters.

This beat an average of peers in the Societe Generale Trend Index which finished down 4%, said an investor document.

The funds did not immediately respond for a request for comment.

(Reporting by Nell Mackenzie and Carolina Mandl; Editing by Tomasz Janowski and Barbara Lewis)

By Nell Mackenzie and Carolina Mandl

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