Plotkin’s Melvin Capital Extends First-Quarter Losses to 49%

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Melvin Capital Management, the once high-flying hedge fund that lost billions of dollars after its bearish wagers were caught up in a Reddit-fueled rally, saw its first-quarter decline extend to 49%.

The fund slid 7% last month, reversing a gain of almost 22% the month before, according to people with knowledge of the matter. In January, the fund dropped 53%.

The firm, founded by Gabe Plotkin, was among several that took heavy losses after retail traders banded together to push stocks including GameStop Corp. to new heights. Plotkin, who had been short the company, then took a $2.75 billion investment from Citadel, Point72 Asset Management and others.

Plotkin in February was called by Congress to testify about the debacle. He told lawmakers that the hedge fund industry will adapt to avoid the kinds of market dynamics that led to his fund’s losses.

A spokesman for the firm declined to comment.

Another firm caught in the cross hairs of the GameStop saga, Maplelane Capital, which lost 45% in January, is starting to recover.

The fund rose 6.5% in February and 2.1% in March, according to people familiar with the matter, and ended the first quarter with a loss of 39.5%. The fund benefited from its long and short wagers on technology and consumer-focused companies, one of the people said.

Maplelane has made money in 14 of the past 15 months, one of the people said.

The $3 billion New York-based firm, run by Leon Shaulov and Rob Crespi, declined to comment.

Overall, the hedge fund industry struggled to make money last month amid higher equity market volatility. The average fund was about flat in March and gained 2.2% in the first quarter, according to Hedge Fund Research Inc. The S&P 500 index rose 4.2% in March and 6.2% for the quarter, with dividends reinvested.

Lone Pine Capital, Tiger Global Management and Whale Rock Capital Management, which often focus on tech wagers, posted dismal March returns.

Meanwhile, Glenview Capital, which ended 2020 with a 9.5% gain despite steep losses earlier in the year, soared 25% in its flagship fund through March thanks to successful wagers on health care stocks, including DXC Technology Co., Cigna Corp., AmerisourceBergen Corp. and McKesson Corp.

Here’s how other hedge funds fared in March and in the first quarter, according to people familiar. Representatives for the firms declined to comment.

FundStrategyMarchQ1
Glenview OffshoreEquity7.8%25.4%
Hudson Bay InternationalMultistrategy-0.29
Citadel WellingtonMultistrategy0.36
DE Shaw CompositeMultistrategy1.45
Sculptor MasterMultistrategy-0.23.5
MillenniumMultistrategy0.23
Balyasny Atlas EnhancedMultistrategy-0.41.8
DE Shaw OculusMultistrategy11.5
ExodusPointMultistrategy0.31
Tiger GlobalEquity-5.30.8
Renaissance RIDAEquity5-1
Renaissance RIDGEEquity3.6-3.4
Renaissance RIEFEquity3.7-4.7
Lone PineEquity-7-10
Whale RockEquity-6-14
Maplelane CapitalEquity2.1-39.5
Melvin CapitalEquity-7-49

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