Some Hedge Fund Giants Post Monster Returns in 2022

Looks like someone has a thing for Mondays. It is Dan DeFrancesco and here’s hoping you made it through the weekend with your New Year’s resolution intact. But even if you didn’t, who cares? Nobody keeps score. Just get back on track.

In print, we’ve got stories about a billionaire returning to the helm of a company he created (but probably not the one you’re thinking of), more trouble in cryptoland for a major industry player, and inside the largest modern house in the US.

Goldman Sachs is also expected to start one of its biggest rounds of layoffs ever this week, with as many as 3,200 jobs remaining.

But first we have hedge fund returns.


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Photo by Citadel CEO Ken Griffin

Citadel



1. The good, the bad and the ugly on the buy side.

It’s yield season for hedge funds, and boy is this year a doozy.

Insiders Alex Morrell has a breakdown of how some of the flagship strategies at top hedge funds such as AQR, Citadel, DE Shaw and Point72 did.

Alex’s story gets into the nitty-gritty—and more importantly, the specific numbers—but the big takeaway is this: While 2022 was a pretty terrible year for the hedge fund industry, some of the industry’s best funds crushed it.

And frankly, that’s the way it should be.

If I had the kind of money that allowed me to invest in a hedge fund—and one day I might if one of my 10-game parlay bets hit—I wouldn’t care how well it performed when the market was up. I’d like to know how it went when everything was down.

Everyone, and I mean EVERYONE, did well investing in 2021. You could have slept on a double digit return.

The past year was an absolute minefield between interest rate hikes, inflation and the tech stock apocalypse. And while it may seem impossible to figure out a way to make money in that kind of environment, that’s exactly when I expect a hedge fund to rise.

Because if that’s not the case, what am I paying you to do?

PS- If you are in a fund and want to brag about your returns, you can write Alex here.

Check out the returns for some of the best firms in the industry.


In other news:

Will Smith played a fictionalized version of himself

Will Smith played a fictionalized version of himself on “The Fresh Prince of Bel-Air.”

Warner Bros.



2. FTX spent $40 million on expenses over 9 months. I have not received the latest edition of Effective Altruism Monthly, but I’m not sure how that fits into the philosophy. Here is an overview of where some of the money went. Meanwhile, Sam Bankman-Fried, FTX’s disgraced founder, would appreciate some of Robinhood’s $450 million bet to fund his legal defense despite allegedly buying those shares with customers’ money he borrowed.

3. The return of the king? Things are so bad at Amazon that some insiders are speculating about a potential return of founder Jeff Bezos. I’m not sure why anyone with that much money would want to work again, but that kind of mindset is probably why I’ll never be rich enough to be in that position. More on what a potential Bezos sance would look like.

4. A key player in the crypto ecosystem is struggling. Digital Currency Group, which owns a number of companies in the area, is liquidating its asset unit HQ. DCG is also in the middle of a beef with Gemini over whether $900 million Genesis, which it owns, borrowed from customers on the crypto exchange. Perhaps the two sides can even things out at a rock show by the Winklevoss twins, Gemini’s co-founders.

5. FTX investors, the regulators would like a word. The SEC wants to know why investors in the bankrupt crypto exchange missed all its red flags, Reuters reports. Maybe Taylor Swift should take a course on due diligence.

6. A Wells Fargo employee allegedly got so drunk on a flight that he peed on a woman in business class. The bank fired the unnamed man, who was a VP at the firm and lived in Mumbai. Read more here.

7. Do you want to buy or rent? We’ve got you covered. Abdul Muid, a realtor in New York City, shared some advice on how to navigate the market and get the best deals. Here’s what you should do.

8. Turns out it might actually have been the shoes. A pair of Jordan 11 “Concords” worn by Michael Jordan in 1996 recently sold for more than $92,000. Here’s why high-end collectibles may be an asset class worth considering.

9. ETF = exclusionary against women. Only 11% of U.S. fund managers are women in the $6.5 trillion U.S. ETF industry, Bloomberg reports. Here’s how one fund is trying to change that with an exchange-traded fund investment team.

10. A new throne for the Prince of Bel Air. The largest modern home in the United States, which sits at an incredible 105,000 square feet, just sold for $126 million to Fashion Nova’s billionaire CEO. Check out inside the Los Angeles mega-mansion.


Curated by Dan DeFrancesco in New York. Feedback or tips? Email [email protected], tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London.

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