D1 Capital Partners, of Dan Sundheim, one of last year’s best-performing hedge funds, lost about 20% this month through Wednesday, making it one of the biggest casualties yet to come as retail investors aim to preferred positions of hedge funds.
The fund raised about $ 20 billion as it began this year – far more than rivals such as Melvin Capital and Maplelane Capital, who took blows to their portfolios amid the attacks. The loss of D1, described by people informed about the situation, contrasts with a 60% increase during last year’s pandemic turbulence.
A growing number of hedge funds, including Steve Cohen’s Point72 Asset Management, experienced rapid damage to farms amid wild market fluctuations this month. The $ 19 billion Cohen company has dropped about 10 percent to 15 percent since the beginning of the year, according to people with knowledge of the issue. He was among the investors in Melvin and showed another 750 million dollars in that company after the traders targeted their short positions.
Read more: Cohen’s Point72 loses 10-15% on Hedge Fund Carnage
Behind them all are retailers, who use chat rooms and social media to coordinate attacks on popular hedge funds. The groups have released short tablets for stocks such as GameStop Corp. and AMC Entertainment Holdings Inc., which in turn forced money managers to place bets urgently. Hedge fund clients pursued by Goldman Sachs Group Inc. they have covered shorts at an almost unprecedented rate in the last two weeks.
Read more: hedge funds reduce reducing equity exposure at the fastest pace in 2014
Sundheim, 43, started D1 in 2018 after leaving Viking Global Investors, where he was chief investment officer.
D1 is affected to some extent by attacks, as private companies account for about a third of its holdings and the company has reduced its exposure. The fund is closed for new investments and does not intend to open for additional capital, said one of the people, asking not to be appointed, as such decisions are confidential.
The Goldman Sachs Hedge Industry VIP ETF, which tracks the most popular shares of hedge funds, fell 4.3% on Wednesday for the worst day in September. All but one of the members were absent for the day. Gross leverage, an indicator of hedge fund risk appetite that takes into account long and short positions, saw its largest active decline since August 2019, Goldman data show.
– With the assistance of Zeke Faux