Rokos and Brevan Howard hit by July volatility

Rokos Capital Management and Brevan Howard Asset Management were among a group of prominent hedge funds that suffered losses in July as sharp swings in artificial intelligence stocks disrupted strategies across the industry, according to a report by Bloomberg. Chris Rokos's firm fell 1.2% during the month, reducing its 2026 gain through July to 8.1%. Brevan Howard's Master fund also declined about 1.2%, leaving it up roughly 0.9% for the year. Said Haidar's Jupiter fund was hit harder, falling an estimated 3.2% in July and taking its year-to-date loss to about 13%, according to the people familiar with the results.

The losses followed the strongest first half for hedge funds in five years. A sudden reversal in AI-related stocks exposed crowded positions and created large swings across markets. The selloff was triggered in part by concerns over the enormous capital spending commitments underpinning the AI boom. Nvidia's announcement of more than $750bn in new AI-related deals fueled questions about the sustainability of technology companies' spending, while an unexpected advance by a Chinese AI developer added to concerns about the competitive landscape.

The turmoil was intensified by the collapse of AI-focused hedge fund Situational Awareness, which plunged 67% in July and was forced to sell most of its public-equity portfolio to Citadel to meet margin calls. The fallout extended beyond technology-focused managers. Macro firms, traditionally associated with currencies, interest rates and other asset classes, have become increasingly active in equities and are more exposed to sharp stock moves. Brevan Howard has traded equities for more than two decades, has expanded its equity operation in recent years, and has built a team of sector specialists under strategist Abhijit Chakrabortti.

Performance was highly dispersed. Citadel's Equities and Tactical Trading strategies gained 14.2% and 11.1%, respectively, while Renaissance Institutional Equities rose 9.2% and Quantedge gained 7.8%. DE Shaw was among the firms that navigated the turbulence successfully, with its Oculus fund gaining 0.9% in July and its Composite fund adding 0.4%. Millennium fell 2.1%, Point72 dropped 3.3%, Marshall Wace's TOPS strategy lost 2.6%, and Coatue declined 8.3%. AI-focused strategies were particularly vulnerable: Point72's Turion dropped 11.4%, Whale Rock's Long Only and Flagship strategies plunged 18.8% and 21.7%, and Altimeter fell 11%.

Despite the difficult month, many managers remain well ahead for the year. Quantedge was up 34.6% through July, DE Shaw's Oculus fund 27.7%, Citadel's leading strategies about 27%, and D1 Capital's stock portfolio 23.3%.