The Top Hedge Funds of 2021
Plus, a few honorable mentions
2021 marked a hectic year for hedge funds. For starters, the S&P 500 outperformed the Nasdaq 100 for the first time since 2016.
Many seasoned, veteran fund managers had a hard time dealing with a multitude of different macroeconomic factors that rocked major pandemic beneficiaries. From coronavirus to inflation to supply chain issues, countless 2020 winners dished out negative returns during 2021.
For example, famed veteran manager Chase Coleman of Tiger Global, returned a loss of 7% during the year, representing a dollar loss of roughly $1.5 billion. In comparison, the S&P 500 returned 26.9% during 2021. During 2020, Tiger Global returned a staggering $10.4 billion. The 2021 loss represents Tiger Global’s first annual decline since 2016, and its third annual loss in its 20 year history. The fund declined 26% in 2008 and 15% in 2016.
Investors will likely remember the first quarter of 2021 when GameStop squeezed to record highs, fueled by collective investors from r/WallStreetBets. After GME stock ballooned to as high as $483, hedge funds that were on the short end faced devastating losses. Gabe Plotkin’s Melvin Capital may have been the worst hit and certainly the most publicized.
In January, Melvin Capital lost 53%. No, that isn’t a typo. Melvin ultimately got a $2.75 billion bailout from industry buddies Ken Griffin and Steven Cohen. In contrast, Melvin Capital returned 53%, or roughly $860 million, in 2020.
However, from Feb. 1st to Dec. 31st of 2021, Melvin Capital returned 33% and ended the year with $11.7 billion in assets. Even after returning a total of -39% in 2021, Plotkin isn’t going anywhere, much to the dismay of r/WallStreetBets.
A handful of funds managed to outperform the S&P 500 in impressive fashion. Notably, 2021 was a promising year for funds who profited off of several key trades, such as meme stocks, commodities, and technology.
Honorable Mentions
Third Point - Dan Loeb: 25.7% (Accurate as of November 2021)
Citadel/Wellington Fund - Ken Griffin: 26.2%
Pershing Square - Bill Ackman: 26.9%
Alta Fox - Connor Haley: 44%
SRS Investment Management - Karthik Sarma: 46% (Accurate as of November 2021)