Dan Sundheim’s D1 Capital Partners, one of last year’s best-performing hedge funds, lost about 20% this month through Wednesday, making it one of the biggest casualties ever to appear since the retail investors point to the preferred positions of hedge funds.
The fund managed about $ 20 billion as it began this year, far more than rivals like Melvin Capital and Maplelane Capital who have also achieved success in their portfolios amid the attacks. The loss of D1, described by people reported on 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, have been accounting for rapid damage to farms amid market fluctuations. Cohen’s $ 19 billion firm has fallen between 10% and 15% since the beginning of the year, according to people who are aware of it. He was among Melvin’s investors and threw an additional $ 750 million into that company after traders pointed to his short positions.
Read more: Cohen’s Point72 loses 10-15% amid coverage butcher of the month
Behind it all are retailers, who use chat rooms and social media to coordinate attacks on popular hedge fund bets. The groups have launched small stocks for stocks like GameStop Corp. and AMC Entertainment Holdings Inc. which, in turn, have forced money managers to urgently disconnect bets. Hedge fund clients followed by Goldman Sachs Group Inc. they have been covering shorts at an almost unprecedented rate for the past two weeks.
Read more: hedge funds reduce equity exposure at the fastest pace since 2014
Sundheim, 43, started D1 in 2018 after leaving Viking Global Investors, where he was investment director.
D1 is affected to some extent by the attacks because private companies account for about a third of its holdings and the company has been reducing its exposure. One of the people said the fund is closed for new investments and has no plans to open any additional capital, asking that it not be designated because these decisions are confidential.
The Goldman Sachs Hedge Industry VIP ETF, which tracks the most popular shares of hedge funds, fell 4.3% on Wednesday during the worst day since September. All but one member was not present during the day. Gross leverage, an indicator of hedge fund risk appetite that takes into account short and long positions, experienced its largest active reduction since August 2019 on Monday, according to Goldman data.
– With the assistance of Zeke Faux