Marshall Wace Long-Short Fund Reports Record Loss

A Marshall Wace hedge fund that bets on rising and falling stocks slumped to a record loss in January, as the U.S. market was shaken by a short squeeze driven by retail investors.

The $4.4 billion MW Global Opportunities Fund fell by an estimated 7%, the biggest monthly decline since it started in 2009, according to an investor letter seen by Bloomberg. That compares with an average loss of 5.9% for a group of long-short hedge funds tracked by Goldman Sachs Group Inc., and a drop of about 1% for the S&P 500.

A spokesperson for Marshall Wace, one of Europe’s largest hedge-fund firms, declined to comment.

London-based Marshall Wace, which manages about $52 billion, joins stock-pickers such as Eminence Capital and Whale Rock Capital Management in losing money as a Reddit-fueled trading surge roiled markets. Melvin Capital was hit particularly hard, plunging 53% as retail investors lifted some of the stocks most shorted by hedge funds.

It’s not clear how the MW Global Opportunities Fund run by Fehim Can Sever lost money. It gained 18.5% last year, and has posted only one annual loss -- down 0.7% in 2016 -- since it opened.

Marshall Wace’s flagship MW Eureka fund lost an estimated 1.5% in January, the investor letter shows. The firm’s MW Market Neutral TOPS fund gained about 3.8%.

Marshall Wace typically avoids wagering against companies where short interest is more than 10% or liquidity is low and volatility high, according to a person with knowledge of the matter, who asked not to be identified because the information is private.

FundAUMJanuary Performance2020
MW Eureka$21b-1.5%14.3%
MW Market Neutral TOPS$5.4b3.814.2
MW Global Opportunities$4.4b-718.5

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