Steve Fleming’s Post

As a Hedge Fund COO being able to scale both up and down with your tech stack is important. Annalices discusses with Hedgeweek. Hedge Funds and Technological Elasticity Neovest. https://lnkd.in/envzqTpx

Point72, Citadel and Millennium lead H1 hedge fund performance Steve Cohen’s Point72 Ken Griffin’s Citadel and Izzy Englander’s Millennium Management emerged as the top performers in the first six months of 2024, marking a strong recovery for major Wall Street hedge funds after a sluggish 2023, according to a report by Business Insider. Figures obtained by Business Insider reveal that Point72, the Connecticut-based hedge fund managed by Cohen, is up 8.7% year-to-date. Citadel and Millennium have also posted significant gains, with the former’s Tactical Trading Fund led the pack with an impressive 13.7% return in the first six months, according to unnamed sources. The firm’s flagship Wellington fund meanwhile rose by 8.1%, while Millennium’s flagship fund increased by 6.9%. Despite the gains, top-tier hedge funds still lagged the S&P 500 index, which rose more than 16% during the same period. Last year, Cohen, Griffin and Englander also struggled to keep pace with the S&P 500 and the Nasdaq. Overall, hedge funds reported an average gain of 5.2% by the end of May, according to Hedge Fund Research. #hedgefund #returns #multistrategy

🚨 Citadel to Return $7 Billion of Profit to Hedge Fund Clients 🚨 Citadel has announced its intention to give back approximately $7 billion to clients, a decision prompted by the substantial double-digit gains witnessed in its multistrategy hedge funds over the last two years, elevating assets to an impressive $63 billion. The flagship Wellington fund of Citadel, renowned for its resilience and agility, achieved an impressive 15% gain in November, concluding a remarkable 38% increase in 2022. In an industry where stability and consistent returns are highly valued, Citadel's performance distinguishes itself as an outlier among its multistrategy counterparts. The explosive growth of multimanager hedge funds, exemplified by Citadel, has attracted investors seeking relative stability and dependable returns. These funds distribute their resources across various teams operating independently in diverse markets and strategies. While many multistrategy peers have reported single-digit returns this year, Citadel's success remains a testament to its distinctive approach and market insight. The capital return, scheduled for December and January, positions Citadel to commence the new year with $58 billion in assets. This strategic move aligns with the common practice among hedge fund managers to return capital, preventing funds from becoming overly large and ensuring the capacity to make profitable investments in specific asset classes. #hedgefunds #hedgefund #quantitativefinance #trading #recruitment #newyork

"On the state of hedge fund flows so far in 2024, an eVestment report out Wednesday put it bluntly: “This was not a great start to the year.” A lot more money was pulled from hedge funds than was invested in them at the start of 2024, which could be a warning for the months to come. In January, investors yanked an estimated $14.3 billion from hedge funds, the second largest net outflow to begin a year since 2009, according to Nasdaq’s eVestment..... “What’s making the January net outflow the largest since 2016 is the result of two factors: very few meaningful new allocations, which isn’t rare in January’s data, along with very few but large redemptions and a few smaller outflows. If this were any other month than January, it wouldn’t feel so bad,” the report said." Why This January Was the Worst for Hedge Fund Flows in Years https://lnkd.in/eZwSEutB

Great to see a potential future need to scale down becoming an upfront consideration. If you have more capacity or functionality than you need it definitely makes sense to turn it off. Will be both cost beneficial and also reduce a firms environmental footprint. Ongoing management of capacity (down as well as up) is a practice that members of Sustainable Trading are working to implement. Fantastic to see it being put into practice and being rolled out to clients.

I found this table of 2023 hedge fund performance in a Bloomberg article on Haider macro hedge fund (there’s a paywall but basically it was -43.5% in 2023 after a +193% gain last year). Decided to add in the performance of low-cost, diversified passive funds in the US for good measure (disclaimer: not saying these are suitable in themselves for anyone). I suspect that if one had a similar 2022 table, the rankings would be quite different. As for hedge fund return data “over the long term” - there is quite a lot of survivorship bias. We like to think that we ourselves or some star managers we pay lots to or can access preferentially are better, faster and smarter than the market, and that the eye-watering returns are not just luck. There probably are some, but I’m skeptical about how consistently they can outperform over accumulation periods for retirement and other goals, and whether I am able to correctly pick them consistently. The Bloomberg article https://lnkd.in/ga_wWwjj

The world's 10 wealthiest hedge fund managers. 💰 Ken Griffin: Citadel boss has a net worth of $37 billion. 💰 David Tepper: Founder of hedge fund Appaloosa Management has a fortune of $20.6 billion. 💰 Steve Cohen: Point72 founder and owner of the New York Mets has a net worth of $19.8 billion. 💰 Michael Platt: Co-founder of BlueCrest Capital Management has a net worth of roughly $18 billion. 💰 Ray Dalio: The 74-year-old founder of Bridgewater Associates has a fortune of $15 billion. 💰 Izzy Englander: Founder of hedge fund Millennium Management has a net worth of over $12 billion. 💰 Chris Hohn: TCI Fund Management boss has a net worth of $9.5 billion. 💰 Bill Ackman: Founder and CEO of Pershing Square is worth $9.3 billion. 💰 David Shaw: Founder of D. E. Shaw has a fortune of $8.3 billion. 💰 Paul Tudor Jones: A macro trader and boss of Tudor Investment Corporation is worth $8.1 billion. #hedgefunds

Great chart on changes in demand for different hedge fund strategies.