Finance

7 big-name hedge funds that are tanking this year as credit and quant strategies flounder

  • After a tumultuous start to the year, many big-name managers — and the markets overall — have gotten back in the black.
  • Still, despite the markets’ rally on the backs of unprecedented monetary and fiscal policies, some funds have struggled and are down double-digits midway through 2020.
  • Billionaire-run shops like Glenview Capital and Winton Group, credit-focused funds like Sculptor’s Credit Opportunities fund and Angelo Gordon’s Mortgage Value strategy are all down double-digits this year. 
  • Visit Business Insider’s homepage for more stories.

In March, the devastation was widespread.

Quants were overwhelmed by fast-moving markets, billionaire stock-pickers lost 10% in a couple of weeks, once-safe relative-value strategies were slammed, and structured credit investors were being margin-called by their lenders. 

And then the pain subsided. Markets bounced back quickly thanks to a wave of stimulus and the Fed Reserve brought down interest rates. Hedge funds have ticked back up near even, on average, and many big players have made money for the year. The average hedge fund was down less than 3% through mid-year, according to Hedge Fund Research. 

Still, there are a handful of well-known players running strategies that haven’t been so fortunate; the investing environment after all, as many managers have said, makes no sense at all, and even people like Baupost’s Seth Klarman have struggled to read the market (the billionaire recently told investors that the firm was a net seller of equities during the second quarter’s big rally). 

See more: Billionaire Paul Tudor Jones says the pandemic has thrown off economic models so much that people would ‘be better off getting financial advice from TikTok’

Below are some notable funds and strategies at big players, according to HSBC’s Hedge Weekly report, that have struggled to find their footing in an up-and-down 2020. 

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