Despite the slumping stock market in January, hedge funds ended the month with strong gains.
Reuters reported that big-name firms such as Citadel, Pine River Capital and Pershing Square Capital helped the industry outperform the stock market during the period, dismissing the image that hedge funds charge high fees with little return.
New York-based Pine River gained 2.47% at its flagship fund last month, while its fixed-income fund returned 2.58%. Two of Chicago-based Citadel’s funds climbed 3.4% in January, while one of Pershing Square’s strategies returned an astonishing 4.1% during the same period.
While the first month may not be a strong indicator of how the rest of the year would perform, the article added that hedge fund industry analysts are optimistic that January’s performance may help revive the industry after investors pulled out billions in December.
The article also noted that firms that lost money that month recorded smaller declines than the broader stock market, including Third Point and Greenlight Capital.