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By Nell Mackenzie and Carolina Mandl
LONDON/NEW YORK (Reuters) -Hedge funds started 2025 buoyed by choppier markets driven by uncertainty over new U.S. President Donald Trump's policies and a tumble in tech-darling Nvidia as Chinese artificial intelligence startup DeepSeek emerged, sources told Reuters.
Bridgewater Associates, one of the world’s biggest hedge funds, posted gains of 8.2% last month in its macro flagship fund Pure Alpha, beating the main stock indexes.
A global tech rout at the start of last week was followed by volatility ahead of Trump's weekend announcement of sweeping tariffs on Canada, Mexico and China, kicking off a trade war that could hurt economic growth internationally.
Trump delayed tariffs on Canada and Mexico on Monday by one month, fueling wild swings in currency, bond and share markets.
Despite the turmoil, stock-picking hedge funds that take bets based on company fundamentals recorded an average 2.6% return, their best month since February 2024, given a broader market rally, a Goldman Sachs prime brokerage note sent to clients on Tuesday showed.
Some technology-focused long/short equity hedge funds managed to navigate the tech rout.
Cadian Capital was up 8.32% in January, boosted by long positions in tech names, mainly small and mid-sized companies.
SoMa Equity Partners rose 4.73% last month, helped by long positions in Roblox, Wix, Uber Technologies and Elastic, a source familiar with the matter said. Shannon River also went up 2.46%, according to preliminary data, two sources said. Light Street went up 4.14%, another person said.
Systematic equity funds returned 2.71% on average, the Goldman note also showed.
Stock markets in the United States and Europe ended January near record highs, as did MSCI's World Stock Index.
Hedge funds that follow a variety of strategies also ended the month higher. Daniel Loeb's Third Point flagship TP offshore fund was up 3.3%, while Cinctive gained 2.7%.
Citadel's equity fund posted a 2.7% return in January, while its flagship Wellington fund rose 1.4%, a source familiar with the matter said on Tuesday, declining to be identified because the information was private.
Business Insider reported the Wellington result on Monday.
All Citadel's five investment strategies posted positive performances last month, the source added.
Founded by investor Ken Griffin, Citadel had $65 billion in assets under management as of Jan. 1.
Billionaire investor Cliff Asness's AQR Capital Management's systematic stock fund - the Delphi Long-Short Equity strategy - returned a net 3.5% in January, said another source close to the matter. It benefited from trades in developed equity markets and by picking less risky stocks, the source added.
The $2.5 billion stock strategy is part of the $123 billion hedge fund.
Winton's multi-strategy quantitative fund, which trades many different asset classes systematically, finished January up 0.3%, another source said.
Fund name Jan % net return
Citadel Tactical 2.7
Citadel Equities 2.7
Citadel Global Fixed Income 1.9
AQR Apex Strategy 2.5
AQR Delphi L/S Equity 3.5
Winton Multi-Strategy 0.3
Transtrend Diversified 0.9
Citadel Wellington 1.4
SoMa Equity 4.7
Shannon River 2.46
Pure Alpha 18% vol 8.2
Third Point offshore 3.3
Light Street 4.14
Graham Prop Matrix 3.59
Graham Quant Macro 2.51
Cadian 8.32
Cinctive 2.7
(Reporting by Nell Mackenzie in London and Carolina Mandl in New York; Additional reporting by Herbst-Bayliss; Editing by Mark Porter, Stephen Coates and Rod Nickel)
