Citadel Hedge Fund Gains 9% in Strong Multi-Strategy Year

(Bloomberg) -- Big multi-strategy hedge funds found a way to make money in a tumultuous year when so many other firms floundered.

Ken Griffin’s Citadel, which runs more than $30 billion, rose 9.1 percent in its flagship Wellington hedge fund last year, and Izzy Englander’s $35 billion Millennium Management gained nearly 5 percent, according to people familiar with the matter. Hudson Bay Capital Management, which manages $3 billion, returned 6.5 percent, another person said.

These hedge funds, which trade across assets from stocks and bonds to currencies and interest rates, took advantage of the high volatility that sunk many equity strategies. Hedge funds on average sank almost 6 percent in 2018, according to preliminary figures from the Bloomberg Hedge Fund Database.

“Not all multi-strategy funds are made the same, which is really key,” said Tim Ng, chief investment officer of Clearbrook Global Advisors, which invests in hedge funds. “But the ones that did well last year, each of them had at least one allocation to a segment of the market that did particularly well," he said, pointing to volatility, convertible arbitrage, event-driven and securitized-credit wagers.

Not all multi-strategy firms were winners. Balyasny Asset Management, run by Dmitry Balyasny, ended the year down 7.1 percent in its Atlas Enhanced Fund, the people said. The firm has seen assets plunge to about $7 billion from $11.3 billion in early 2018.

D.E. Shaw & Co.’s $14 billion Composite fund was among the top performing multi-strategy vehicles, gaining 11.2 percent last year, Bloomberg reported Monday.

Citadel’s other strategies also notched gains in 2018. The Global Equities fund returned nearly 6 percent, the Tactical Trading fund was up almost 9 percent, and the Global Fixed Income fund rose 6.6 percent, one of the people said.

Spokesmen for the firms declined to comment.

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