Hedge funds are getting killed, says hedge fund manager Dan Loeb.
Loeb's Third Point Capital put out its quarterly letter to investors on Tuesday, calling the first three months of 2016 "one of the most catastrophic periods of hedge fund performance that we can remember since the inception of this fund."
Third Point was down 2.3 percent during the first quarter, which compares with a 1.3 percent gain for the S&P 500 over the same period. (As bad as that may be, though, it could have been worse — Bill Ackman's Pershing Square was down more than 25 percent in the quarter.)
Despite the weak performance, Third Point believes it is positioned to do well the rest of the year.
"There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies," Third Point said. "We believe we are well-positioned to seize the opportunities borne out of this chaos and are pleased to have preserved capital through a period of vicious swings in treacherous markets."