The average hedge fund just enjoyed its best start to a year in more than 20, rising 6.1% in the first quarter. Not only is that its best quarterly return since the turn of the century, it even managed what feels like a rarer feat: Beating the broader markets by nipping the S&P 500, which managed only a 5.8% Q1.
Of course, that’s just the notional and ultimately imaginary average hedge fund. Other real-world hedge funds had a rather different experience, like this one we all remember so well from the first quarter.
Melvin Capital, the hedge fund at the center of the GameStop trading frenzy, lost 49% on its investments during the first three months of 2021, a person familiar with the matter said on Friday.
The fund, founded by Gabe Plotkin, lost 7% in March, the source added, speaking on condition of anonymity…. Melvin Capital ended January with a 53% loss on its investments in January, the person said.
“51% to go!” posted one user on r/WallStreetBets in response to Melvin’s reported losses.
Meanwhile, another hedge fund that failed to manage even average performance for the first quarter won’t be seeing another.
Harvard-backed TPRV Capital is shutting down its hedge fund after investors pulled their cash…. TPRV’s fund lost 2.8% in 2020, and was about flat in the first two months of this year…. The firm is considering its next steps, which could include raising capital or joining a larger platform firm, Toscani said.
Dan Loeb, however, is here to balance things out, having beaten the average hedge fund with an 11% gain in the first three months of 2021. And while he doesn’t think much of the degenerates who kneecapped Melvin, the two share at least one interest.
Hedge fund Melvin Capital lost 49% on its investments in Q1 -source [Reuters]
‘51% to go’: Reddit crowd rejoices at report that Melvin Capital rang up a 49% first-quarter loss [MarketWatch]
Harvard-Backed TPRV to Unwind Hedge Fund, Return Outside Cash [Bloomberg]
Hedge funds post best first-quarter return since 2000 [P&I]