The typical hedge fund simply loved its best start to a year in additional than 20, rising 6.1% within the first quarter. Not solely is that its greatest quarterly return for the reason that flip of the century, it even managed what seems like a rarer feat: Beating the broader markets by nipping the S&P 500, which managed solely a 5.8% Q1.
In fact, that’s simply the notional and finally imaginary common hedge fund. Different real-world hedge funds had a rather different experience, like this one all of us bear in mind so properly from the primary quarter.
Melvin Capital, the hedge fund on the middle of the GameStop buying and selling frenzy, misplaced 49% on its investments through the first three months of 2021, an individual aware of the matter mentioned on Friday.
The fund, based by Gabe Plotkin, misplaced 7% in March, the supply added, talking on situation of anonymity…. Melvin Capital ended January with a 53% loss on its investments in January, the individual mentioned.
“51% to go!” posted one person on r/WallStreetBets in response to Melvin’s reported losses.
In the meantime, one other hedge fund that didn’t handle even common efficiency for the primary quarter won’t be seeing another.
Harvard-backed TPRV Capital is shutting down its hedge fund after buyers pulled their money…. TPRV’s fund misplaced 2.8% in 2020, and was about flat within the first two months of this 12 months…. The agency is contemplating its subsequent steps, which may embody elevating capital or becoming a member of a bigger platform agency, Toscani mentioned.
Dan Loeb, nevertheless, is right here to steadiness issues out, having crushed the typical hedge fund with an 11% gain within the first three months of 2021. And whereas he doesn’t think much of the degenerates who kneecapped Melvin, the 2 share a minimum of one interest.
Hedge fund Melvin Capital lost 49% on its investments in Q1 -source [Reuters]
‘51% to go’: Reddit crowd rejoices at report that Melvin Capital rang up a 49% first-quarter loss [MarketWatch]
Harvard-Backed TPRV to Unwind Hedge Fund, Return Outside Cash [Bloomberg]
Hedge funds post best first-quarter return since 2000 [P&I]