Two Sigma, DE Shaw Posted Losses in Some Funds in January: FT

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Two Sigma Investments and DE Shaw are among the quant hedge funds that suffered losses in some funds in January as retail investors on Reddit fueled market swings, the Financial Times reported.

New York-based Two Sigma lost 5.3% in its Absolute Return fund and 8.6% in its Absolute Return Enhanced fund, the newspaper said, citing people who have seen the numbers. Its Compass macro fund and risk premia funds were about flat last month, one of the people told the Financial Times.

DE Shaw gained 0.9% in its main Composite fund but lost 2.3% in its global macro Oculus fund, the newspaper said, adding both firms declined to comment.

Quant giants, including behemoths Renaissance Technologies and Two Sigma, have been humbled by the gyrations of the pandemic-stricken year, as trading models were thrown off by swings their computers had never seen before. Some hedge funds, facing retail investors who banded together on Reddit to squeeze shorts, even stepped up security to guard against threats and hate.

Renaissance just posted its worst-ever returns across its public funds and has been hit with at least $5 billion in redemptions, according to investor letters seen by Bloomberg.

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