[ad_1]
Dan Sundheim’s D1 Capital Partners, one of last year’s best-performing hedge funds, lost around 20% this month to Wednesday, making it one of the biggest casualties yet to emerge as retail investors target the preferred positions of hedge funds.
The fund was managing around $ 20 billion at the start of this year – far more than competitors such as Melvin Capital and Maplelane Capital, who also hit their portfolios amid the attacks. The loss of D1, described by people familiar with the situation, contrasts with a 60% gain during last year’s pandemic crisis.
A growing number of hedge funds, including Steve Cohen’s Point72 Asset Management, recorded rapid damage to holdings amid wild market swings this month. Cohen’s $ 19 billion business is down about 10% to 15% year-to-date, according to people familiar with the matter. He was among Melvin’s investors and invested an additional $ 750 million in the company after traders targeted his short positions.
Read more: Cohen’s Point72 loses 10-15% amid monthly hedge fund carnage
Behind it all are retail traders, who use chat rooms and social media to coordinate attacks on popular hedge fund betting. The groups put short presses on stocks such as GameStop Corp. and AMC Entertainment Holdings Inc. which, in turn, forced the fund managers to urgently cancel bets. Hedge fund clients tracked by Goldman Sachs Group Inc. have hedged shorts at an almost unprecedented rate over the past two weeks.
Read more: Hedge funds reduce equity exposure at fastest pace since 2014
Sundheim, 43, started D1 in 2018 after leaving Viking Global Investors where he was chief investment officer.
D1 is to some extent shaken by the attacks because private companies account for about a third of its holdings and the company has reduced its exposure. The fund is closed to new investment and has no plans to open additional capital, one of the people said, asking not to be named as such decisions are confidential.
The Goldman Sachs Hedge Industry VIP ETF, which tracks the most popular hedge fund stocks, fell 4.3% on Wednesday for the worst day since September. All but one of its limbs were down for the day. Gross leverage, a measure of hedge fund risk appetite that takes into account long and short positions, saw the largest active reduction since August 2019, according to Goldman data.
– With the help of Zeke Faux
[ad_2]
Source link