Key Takeaways
- • Schonfeld Strategic Advisors, a $12 billion multistrategy manager, led the industry in 2024 with a 19.7% return, rebounding decisively from a challenging 2023 marked by staff reductions and underperformance relative to peers.
- • Major multistrategy hedge funds delivered double-digit net returns across the board in 2024, with D.E. Shaw's $65 billion flagship Composite fund returning 18%, Citadel's Wellington fund returning 15.1%, Millennium finishing up 15%, and Walleye Capital posting 17.7% gains.
- • Schonfeld maintained positive monthly performance throughout 2024, hired 19 portfolio managers across multiple strategies, and expanded its international presence with a Dubai office—now managing 40% of firm risk through non-US-based portfolio managers.
- • D.E. Shaw's macro-focused Oculus fund significantly outperformed its multistrategy offering, delivering more than 36% in 2024 gains, while Citadel's Tactical Trading fund (comprising fundamental equities and quant teams) exceeded its flagship Wellington fund with over 22% returns.
- • Despite strong hedge fund performance, nearly all large multistrategy managers underperformed the S&P 500's 23% gain in 2024, highlighting the index's continued outpacing of actively managed alternatives.
Summary
The hedge fund industry's top multistrategy managers delivered substantial returns in 2024, with several $10 billion-plus firms posting double-digit gains and reversing the previous year's headwinds. Schonfeld Strategic Advisors emerged as the clear outperformer, achieving a 19.7% return and reclaiming leadership status after 2023 struggles that included staff attrition and peer underperformance. The $12 billion New York-based manager achieved a remarkable turnaround by maintaining positive monthly performance throughout 2024 while simultaneously expanding its operational footprint and investment infrastructure.
Schonfeld's expansion strategy proved substantial and strategic. The firm hired 19 portfolio managers across different strategy groups and opened a Dubai office as part of a broader international growth initiative. Most notably, the firm has restructured its risk management geography, with 40% of total firm risk now managed by portfolio managers based outside the United States. This shift reflects industry-wide trends toward geographic diversification and operational decentralization among large hedge funds.
The broader multistrategy manager cohort performed solidly throughout 2024, though returns varied considerably by fund strategy. D.E. Shaw, the $65 billion New York-based giant, generated 18% returns in its multistrategy Composite fund while its specialized Oculus macro fund dramatically outperformed at more than 36%. Ken Griffin's Miami-based Citadel delivered 15.1% in its flagship Wellington fund, while its Tactical Trading fund (housing the firm's fundamental equities and quantitative trading teams) achieved over 22% returns. Izzy Englander's Millennium posted 15% for the full year, including a 2.5% December gain. Walleye Capital rounded out the year-end winners with 17.7% total 2024 returns, including a 1.8% December performance.
Despite these strong absolute returns, the hedge fund industry collectively underperformed broader equity indices in 2024. The S&P 500 delivered 23% gains, outpacing even the year's top performers among multistrategy managers. This dynamic underscores the persistent challenge facing actively managed hedge funds in capturing upside during risk-on equity market environments, though their double-digit returns still represent meaningful value creation for institutional investors and sophisticated capital allocators.
Schonfeld's expansion strategy proved substantial and strategic. The firm hired 19 portfolio managers across different strategy groups and opened a Dubai office as part of a broader international growth initiative. Most notably, the firm has restructured its risk management geography, with 40% of total firm risk now managed by portfolio managers based outside the United States. This shift reflects industry-wide trends toward geographic diversification and operational decentralization among large hedge funds.
The broader multistrategy manager cohort performed solidly throughout 2024, though returns varied considerably by fund strategy. D.E. Shaw, the $65 billion New York-based giant, generated 18% returns in its multistrategy Composite fund while its specialized Oculus macro fund dramatically outperformed at more than 36%. Ken Griffin's Miami-based Citadel delivered 15.1% in its flagship Wellington fund, while its Tactical Trading fund (housing the firm's fundamental equities and quantitative trading teams) achieved over 22% returns. Izzy Englander's Millennium posted 15% for the full year, including a 2.5% December gain. Walleye Capital rounded out the year-end winners with 17.7% total 2024 returns, including a 1.8% December performance.
Despite these strong absolute returns, the hedge fund industry collectively underperformed broader equity indices in 2024. The S&P 500 delivered 23% gains, outpacing even the year's top performers among multistrategy managers. This dynamic underscores the persistent challenge facing actively managed hedge funds in capturing upside during risk-on equity market environments, though their double-digit returns still represent meaningful value creation for institutional investors and sophisticated capital allocators.
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