Mudrick Wins, Eminence Drops as Reddit Rout Hits Hedge Funds
- Goldman says long-short hedge funds lost 5.9% during the month
- Mudrick Capital gained almost $200 million on AMC, GameStop
This article is for subscribers only.
As word spread in late January that Melvin Capital had been the target of a short squeeze that cost it almost $4 billion, hedge fund investors braced themselves for yet another blow after a disappointing decade.
But even though a few funds were walloped by double-digit losses, including Melvin’s 53% drubbing, the industry’s performance numbers last month show that most navigated the Reddit-fueled trading frenzy with only a few bruises.
As a group, long-short hedge funds lost 5.9% on an asset-weighted basis during the month, according to Goldman Sachs Group Inc., compared with a 1.1% drop for the S&P 500. Some smaller stock funds made money, and other strategies did, too.