Hedge Funds Witness Strongest Performance Since January Amid Investor Outflows
Hedge funds saw a robust surge in November, with performance indicators hitting their highest since January, as per data from Citco and the PivotalPath Composite Index. Citco-administered hedge funds reported a weighted-average return of 3.3%, driven primarily by a 5.1% gain in equities funds. Over three-quarters of Citco’s funds turned a profit in November.
Positive Trends and Top Performers
The PivotalPath Composite Index echoed this upward trajectory, posting a 2% gain in November—a significant rebound from October’s figures. On a year-to-date basis, the index has seen a 5.8% increase. Equity diversified and equity sector funds took the lead, delivering returns of 8.8% and 8.7%, respectively.
Commodities: The Outlier
While most strategies yielded positive returns, commodities stood out as the sole exception, registering a 0.4% dip.
Outflows from Hedge Funds
Despite the strong performance, Citco’s report highlighted a net outflow from hedge funds in November. Investors pulled out a net total of $2.9 billion, predominantly from equity funds. The largest funds—those boasting over $10 billion in assets—suffered the most significant net outflows. Nevertheless, all fund size categories under Citco’s management reported positive returns for the month.
Among individual hedge funds, D.E. Shaw’s largest fund reported a nearly 10% return in 2023, outperforming the Global Hedge Fund Index by Hedge Fund Research. Meanwhile, Discovery Capital Management’s macro hedge fund, led by ‘Tiger cub’ Rob Citrone, saw an impressive 48% return in 2023, making it one of Wall Street’s top performers. The $1.5 billion fund’s stellar performance was largely fueled by long bets on equities and government bonds in Latin America, US credit, and both long and short bets on financial stocks.
