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

Citadel Income Fund

02/02/2021 22:24

(Adds returns from ExodusPoint, Falcon Edge)
    By Svea Herbst-Bayliss
    BOSTON, Feb 2 (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)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))