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Hedge fund returns for 2018 are trickling into investors' inboxes.
Some investors — including many who invest in quant funds and larger, established names — will be pleasantly surprised by the numbers in what was otherwise a challenging year in a variety of markets. Other investors, especially in equities-oriented funds, will be disappointed by losses that even surpassed that of the , which was down about 6.7 percent last year.
CNBC has collated 2018 performance details from people familiar with the performance. All of the below numbers are attributed to sources unless otherwise specified. Representatives for each firm declined to comment.
For the most part, many of the established names with billions of dollars in assets were the stellar performers of 2018. Ray Dalio's Bridgewater, the world's largest hedge fund, posted gains in its flagship Pure Alpha strategy of 14.6 percent net of fees. Citadel founder Ken Griffin's Wellington Fund is expected to be up more than 9 percent in the year, while its global equities fund generated returns of nearly 6 percent, estimated returns show. D.E. Shaw produced similar returns for its Composite Fund, returning 11.2 percent in the year. Renaissance Technologies' RIDGE Fund gained upward of 10 percent on the year, while its equities fund jumped 8.5 percent. All of these funds utilize some sort of algorithmic trading, although some employ it more than others.
Other so-called multistrategy funds also were able to beat the S&P 500 by a slightly lower margin. Millennium Management, founded by Izzy Englander, gained almost 5 percent for the year. Och-Ziff Capital Management, the publicly traded hedge fund managed by Daniel Och, lost about 1.3 percent in the year, its regulatory filings showed.
Being net long and leveraged did not pan out for many managers in 2018. Greenlight Capital, managed by David Einhorn, lost 34 percent in the year. His largest long positions at the end of the third quarter included AerCap Holding, an aircraft leasing company, and Brighthouse Financial, an insurer.
Shareholder activists, who take stakes in companies and agitate for changes, also had a difficult year. Dan Loeb's Third Point fell 11 percent, thanks to positions in industrial names like United Technologies and DowDuPont. That sector also plagued Nelson Peltz's Trian, which declined more than 6 percent for the year, largely due to the firm's stake in General Electric, which plummeted 56 percent in 2018. Glenview Capital, led by Larry Robbins, saw losses of 16 percent on the year, much of which came in December, thanks to declines in various health-care names.
Some stock pickers were able to successfully hedge the declines in the equity market during the fourth quarter. Coatue Management, led by Philippe Laffont, ended the year effectively flat, after paring back on risk in the fall. Bill Ackman's Pershing Square Holdings was down about 0.7 percent for the year, according to his firm's investment disclosures, a number that was boosted by long bets on ADP and Chipotle.
Several multibillion dollar hedge funds opened their coffers to new investors this year with much excitement. Their returns, though, were a little more muted. For example, Steven Cohen reopened his Point72 Asset Management to outside investors for the first time after his former firm was banned from doing so. Cohen picked up about $5 billion in new money this year. But Point72 returned about half of a percentage point for investors, preserving capital and outperforming the S&P 500, but not generating outsized returns.