Beset by market volatility, crowded into similar strategies and in many cases bogged down by huge piles of investment capital, hedge funds are struggling this year, paving the way for poor results.
"It's hard to maximize returns and also maximize assets," Steve Cohen, the well-known former hedge fund manager who now runs Point 72, a multibillion dollar family office, said during a panel discussion Monday at the Milken Institute Global Conference.
Cohen's own fund fell 8 percent during a four-day period in February, then spent the ensuing months clawing its way back to zero — which is where it ended April, according to someone familiar with the matter.
"The business got crowded," Cohen added on Monday night's panel. "The strategies aren't that differentiated." (Someone familiar with the matter said that Cohen's fund got caught being long momentum stocks during a return to value. A firm spokesman declined, via e-mail, to provide the details of what went wrong.)
As a fund company challenged to eke out returns at the moment, Cohen isn't alone.