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Hedge funds return best month since February 2024

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Returns lifted by broader rally and picking less risky

stocks

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Tariff moves caused turmoil

(Updates story that first ran on Tuesday with Cinctive, Light

Street and Graham funds, updates table)

By Nell Mackenzie and Carolina Mandl

LONDON/NEW YORK, Feb 4 (Reuters) - Hedge funds started

2025 buoyed by choppier markets driven by uncertainty over new

U.S. President Donald Trump's policies and a tumble in

tech-darling Nvidia ( NVDA ) as Chinese artificial intelligence

startup DeepSeek emerged, sources told Reuters.

Bridgewater Associates, one of the world's biggest hedge funds,

posted gains of 8.2% last month in its macro flagship fund Pure

Alpha, beating the main stock indexes.

A global tech rout at the start of last week was followed by

volatility ahead of Trump's weekend announcement of sweeping

tariffs on Canada, Mexico and China, kicking off a trade war

that could hurt economic growth internationally.

Trump delayed tariffs on Canada and Mexico on Monday by one

month, fueling wild swings in currency, bond and share markets.

Despite the turmoil, stock-picking hedge funds that take

bets based on company fundamentals recorded an average 2.6%

return, their best month since February 2024, given a broader

market rally, a Goldman Sachs ( GS ) prime brokerage note sent to

clients on Tuesday showed.

Some technology-focused long/short equity hedge funds

managed to navigate the tech rout.

Cadian Capital was up 8.32% in January, boosted by long

positions in tech names, mainly small and mid-sized companies.

SoMa Equity Partners rose 4.73% last month, helped by long

positions in Roblox ( RBLX ), Wix, Uber Technologies ( UBER )

and Elastic, a source familiar with the matter

said. Shannon River also went up 2.46%, according to preliminary

data, two sources said. Light Street went up 4.14%, another

person said.

Systematic equity funds returned 2.71% on average, the

Goldman note also showed.

Stock markets in the United States and Europe ended January

near record highs, as did MSCI's World Stock

Index.

Hedge funds that follow a variety of strategies also ended the

month higher. Daniel Loeb's Third Point flagship TP offshore

fund was up 3.3%, while Cinctive gained 2.7%.

Citadel's equity fund posted a 2.7% return in January, while

its flagship Wellington fund rose 1.4%, a source familiar with

the matter said on Tuesday, declining to be identified because

the information was private.

Business Insider reported the Wellington result on Monday.

All Citadel's five investment strategies posted positive

performances last month, the source added.

Founded by investor Ken Griffin, Citadel had $65 billion in

assets under management as of Jan. 1.

Billionaire investor Cliff Asness's AQR Capital Management's

systematic stock fund - the Delphi Long-Short Equity strategy -

returned a net 3.5% in January, said another source close to the

matter. It benefited from trades in developed equity markets and

by picking less risky stocks, the source added.

The $2.5 billion stock strategy is part of the $123 billion

hedge fund.

Winton's multi-strategy quantitative fund, which trades many

different asset classes systematically, finished January up

0.3%, another source said.

Fund name Jan % net return

Citadel Tactical 2.7

Citadel Equities 2.7

Citadel Global Fixed Income 1.9

AQR Apex Strategy 2.5

AQR Delphi L/S Equity 3.5

Winton Multi-Strategy 0.3

Transtrend Diversified 0.9

Citadel Wellington 1.4

SoMa Equity 4.7

Shannon River 2.46

Pure Alpha 18% vol 8.2

Third Point offshore 3.3

Light Street 4.14

Graham Prop Matrix 3.59

Graham Quant Macro 2.51

Cadian 8.32

Cinctive 2.7