Hedge funds give 2024 returns in double digits

Market volatility, central bank moves, political uncertainty drive gains

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LONDON/NEW YORK:

Some of the world's largest hedge funds finished 2024 with comfortable double-digit returns, benefiting from chaotic markets, central bank policy changes and a tight US presidential election race.

Hedge funds in 2024 averaged a 10.7% return in the year through November, according to PivotalPath, versus 5.7% in the same period in 2023. But some portfolio managers scored gains above 50% for the full last year.

Light Street Capital's long/short fund focused on technology ended 2024 up 59.4%. Overall, long/short hedge funds had their best year since 2020, Goldman Sachs said.

Macro hedge fund Discovery Capital ended 2024 up 52% after gains across equities, currencies, rates and credit, a source familiar with the performance said, with trades in both emerging and developed countries.

Also on the macro side, Bridgewater Associates' flagship Pure Alpha 18% volatility fund gained just over 11% in 2024 through December 27, a source familiar with the matter said on Thursday.

British hedge fund Marshall Wace, which manages almost $71 billion, returned double-digit gains in several of its funds. Co-founded by British financier Paul Marshall, the firm returned around 14% in its Eureka fund, a source said.

Large US multi-strategy firms also posted double-digit gains. Cinctive Capital went up 22.8% last year, while Schonfeld's flagship hedge fund Strategic Partners rose 19.7%.

Citadel's flagship fund Wellington posted a 15.1% gain, while Millennium Management returned 15% in 2024, according to people familiar with the results.

Citadel offered clients the option to cash out Wellington's profits. Very few clients took up the offer, with redemptions totalling only roughly $300 million out of billions in profit.

Two of DE Shaw's multi-strategy funds posted double-digit returns including its flagship Composite fund, which gained 18% in 2024, and its more macro-oriented fund Oculus, which posted a 36% return in the same period, its best-ever annual performance, said another person close to the matter.

Millennium and DE Shaw's results were first reported by the Financial Times and Bloomberg, respectively.

Jon Caplis, CEO of hedge fund research firm PivotalPath, said there was "a resurgence of the multi-strat space across 2024," and he expects to see more inflows to the strategy.

Last year's gains came as rate cuts from the likes of the US Federal Reserve helped push stocks higher, while a decisive presidential election win for Donald Trump and Bank of Japan rate hikes were other catalysts for big market swings.

Quantitative hedge funds, which use algorithms and coding to track markets, benefited from big moves in several markets including equities, currencies, grains and soft commodities such as cocoa and coffee, which both surged last year.