With calls to increase taxes on the wealthiest and outrage at former Starbucks CEO Howard Schultz’s presidential aspirations, 2019 has not been kind to billionaires o far.
But big-name hedge fund managers were happy to see the calendar turn from a disastrous 2018 to the new year, which has so far gone well for many in the industry.
Dmitry Balyasny’s Balyasny Asset Management, following a year where he closed his “Best Ideas” fund and laid off a fifth of his staff, is up 3.4% after January, a source close to firm said.
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David Einhorn’s Greenlight Capital Management, which recorded the worst year in his $5 billion fund’s 23-year history in 2018, is up 13.4% through January, according to a source close to the firm.
At $7.5 billion Pershing Square, Bill Ackman had his entire 2018 returns wiped out by December, when he finished down 10.8%, pulling down returns for the year to -0.7%. To start 2019 however, his fund has notched double-digit returns of 18.3% through the end of January, investor documents show.
Meanwhile, Joseph Edelman’s Perceptive Advisor’s $3.1 billion flagship fund finished January up 5.5% after losing roughly 7% in December.
On average, hedge funds returned around 4% in January on the backs of solid long-short equity and emerging markets funds’ performance, according to eVestment’s global head of research Peter Laurelli. That’s the highest average single month of returns in nearly 10 years, according to eVestment.
To be clear, the broader market has also returned to its steady ways. After the S&P 500 index fell 9.2% in December, it gained roughly the same percentage in January.
And just because a few big funds rebounded doesn’t mean that it’s smooth sailing for everyone.
“While January was meaningfully positive, it was not universally so, and there are some segments still feeling pain,” Laurelli said, calling out managed futures strategies specifically as an area that struggled.
He also cautioned against assuming all large fund managers have risen with the market, noting “small funds appear to have generally outperformed larger funds.”
“It’s still more of an rebound story than an industry bounce back story,” he said.
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