Hedge Fund Hotshots Suffer Humbling Losses in Coronavirus Chaos

Hedge Fund Hotshots Suffer Humbling Losses in Coronavirus Chaos
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  • Three out of four funds lost money last month amid turmoil
  • Dynamic Beta’s Beer says it’s time to take a hard look at fees

Some of the hedge fund industry’s biggest names made history in March — for all the wrong reasons.

Firms run by Ray Dalio, Michael Hintze, Adam Levinson and others suffered their worst-ever losses last month, with some funds down as much as 40% as the coronavirus pandemic battered global markets. Overall, three out of four hedge funds lost money, according to preliminary data compiled by Bloomberg.

That kind of performance by some of the world’s most prominent firms undermines the rationale for hedge funds, which in theory are supposed to make money when other investment strategies backfire during downturns and periods of volatility. The poor showing might also lead investors to question why they’re paying hedge funds some of the highest fees in the money management industry.

“March has been a devastating month for some funds and some strategies,” said Ed Rogers, head of Tokyo-based Rogers Investment Advisors. “Many funds are going to be throwing up gates and going into survival mode.”

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