Hot-ticket Gamestop deals blow to hedge funds' January returns, some escape

  • 2/2/2021
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BOSTON (Reuters) - Prominent hedge funds including Dan Sundheim’s D1 Capital Partners and Steve Cohen’s Point72 Asset Management chalked up deep losses last month as hotly traded GameStop hurt returns while others like Jason Mudrick’s Mudrick Capital posted gains during January’s turbulent trading, investors in the funds said on Tuesday. The bulk of January’s hedge fund returns were influenced by a late-month rally in unloved stocks including GameStop and AMC Entertainment. The Standard & Poor’s 500 index ended January down 1.1%, with the vaccine rollout and stimulus plans a large focus for the month. Melvin Capital, one of the biggest funds betting on a drop in GameStop’s share price, lost 53% in January when the stock price was forced higher by an army of retail investors using the Robinhood online trading app. Other funds like Point72, which invests with Melvin Capital, lost nearly 9% and D1 tumbled 20% while Maplelane, which was also short GameStop, lost 45%, people familiar with the returns said. David Einhorn’s Greenlight Capital lost 11%. Citadel lost 3%, a person familiar with the returns said on Sunday. Balyasny Asset Management, was down 0.5%, an investor in the fund said. William Ackman’s Pershing Square Holdings, which holds only a handful of stocks and does not traditionally bet that stock prices will drop by shorting, lost 1.3% in January as many stocks sold off amid the trading turbulence. But there were winners too. Mudrick Capital posted its best month ever with a 9.8% gain after a 11.2% gain in 2020, a person familiar with the returns said. Mudrick is not a short seller and is seen as a hero to the retail crowd for having rescued AMC Entertainment with clever financing. Dinakar Singh’s Axon Capital, which bet last year that a vaccine would soon boost travel, posted an 8.5% gain in January and is up another 8% in the first two days of February, a person familiar with the returns said. ExodusPoint, a multi-strategy fund founded in 2017 by Michael Gelband and Hyung Lee that now manages $13.5 billion, gained 1.2% last month. Rick Gerson’s Falcon Edge Capital, a $4 billion fund that returned 43% last year, gained 4.3% in January. And Tiger Global Management which last year earned $10.4 billion, started 2021 with a 1% gain in January. Representatives for the funds either declined to comment or did not respond to requests for comment. Reporting by Svea Herbst-Bayliss; Editing by Megan Davies, Andrea Ricci and David Gregorio

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