Multistrategy funds got off to a much better start this year than in 2016, when they dug themselves into a very big hole that some had trouble escaping.
Their key to success last month appears to be a big bet on stocks. This is underscored by HFR composite data, which show equity hedge multistrategy funds surging 2.26 percent for the month, while the HFRI Macro: Multi-Strategy Index lost 0.14 percent. It’s also reflected in the performance numbers of some major high-profile funds. For example, Citadel founder Kenneth Griffin’s Wellington fund gained 1.85 percent in January, primarily driven by equity strategies such as Surveyor Capital and Global Equities, even as all five of the fund’s main strategies made money.
At the beginning of the year, Citadel merged its Ravelin Capital strategy into Global Equities, reducing the number of equity teams to three. One of its remaining equity strategies, Aptigon Capital, was built up in part from the hiring of 18 portfolio managers from Visium Asset Management. While equity drove Wellington’s peformance in January, the fund’s investments in credit, commodities, and quantitative strategies also kicked in to gains.
Citadel’s best-performing fund was Citadel Global Fixed Income Fund, which surged 2.83 percent, building on its 12.39 percent gain last year, when it was the firm’s top-performing fund. As we earlier reported, the fixed-income fund last year deftly took advantage of major market movements following the June Brexit vote, interest rate changes in the U.S. and UK, and the reversal in rates following the November elections in the U.S. Rates have reversed course in the past six weeks. Citadel Global Equities Fund was up only 0.69 percent last month, while Citadel Tactical Trading, which specializes in equities and some statistical arbitrage, rose 1.07 percent.
Most other multistrategy funds performed in line with Citadel last month. For example, Israel (Izzy) Englander’s Millennium International gained about 1.25 percent in January.
As we earlier reported, Och-Ziff Capital Management’s OZ Master Fund rose 2.15 percent, OZ Asia Master Fund rose 2.3 percent, while OZ Europe Master Fund climbed 1.97 percent.
Several funds that lost money last year started off the new year in the black. Atlas Global Investments was up about 1.46 percent last month after losing 1.33 percent in 2016, while Atlas Enhanced Fund rose 2.21 percent after slipping about 0.64 percent last year. Both funds are managed by Dmitry Balyasny’s Balyasny Asset Management.
Eric Mindich’s Eton Park Fund gained 1 percent after losing 9.4 percent last year.
Other funds that made money last year started off in the red this year. They include Hutchin Hill, which dropped about 0.6 percent for the month.
