Key Takeaways
- • Multistrategy hedge funds posted widespread losses in March 2026, with Dmitry Balyasny's firm down 4.3% for the month and 3.8% year-to-date, while ExodusPoint fell 4.5%, reflecting volatility triggered by Middle East geopolitical tensions and energy price spikes.
- • Industry giants Citadel and Millennium remained profitable despite March declines, with Citadel's Wellington fund down 1.9% in March but positive for Q1, and Millennium down 1.2% in March while still finishing the quarter in the black.
- • Point72 and Schonfeld outperformed peers, with Steve Cohen's Point72 finishing Q1 up nearly 4% despite a sub-1% March loss, while Schonfeld Strategic Advisors ($19 billion AUM) posted flat March performance and 0.9% year-to-date gains.
- • Macro trades backfired on seasoned investors as bets on falling UK and European short-term interest rates collapsed due to inflation concerns stemming from Middle East conflict-driven energy price increases, causing significant losses across the macro space.
- • Trump administration policies and geopolitical crises defined Q1 volatility, following 2025 tariff disruptions and continuing into 2026 with Iranian-Israeli military strikes that upended global markets and investment positioning across major hedge fund platforms.
Summary
March 2026 proved challenging for the hedge fund industry, with major multistrategy managers posting losses amid geopolitical turmoil and macroeconomic headwinds. The month marked the second consecutive year of March volatility for large-cap hedge funds, as Middle East tensions between American, Israeli, and Iranian forces triggered sharp market dislocations. Dmitry Balyasny's $33 billion eponymous firm declined 4.3% in March, bringing year-to-date performance to negative 3.8%, according to Business Insider sources close to the firm. Michael Gelband's ExodusPoint, which carries a heavier fixed-income allocation than diversified multistrategy competitors, posted a steeper 4.5% March loss, while London-based LMR Partners' multistrategy fund fell 2.4%.
Despite the challenging backdrop, the industry's largest platforms demonstrated relative resilience. Ken Griffin's Citadel, flagship Wellington fund, declined 1.9% in March but maintained positive first-quarter returns. Izzy Englander's Millennium Management fell 1.2% during the month while still finishing Q1 in positive territory. Steve Cohen's Point72, which reported $50.7 billion in assets under management at the end of Q1 2026, was down less than 1% in March and achieved nearly 4% Q1 gains. Schonfeld Strategic Advisors, now managing $19 billion in total assets, demonstrated particular strength by posting flat March performance while advancing 0.9% for the year.
The core driver of March losses centered on a macro trade consensus that unraveled rapidly. Investors, including seasoned macro funds, had positioned for falling short-term interest rates in the United Kingdom and Europe, anticipating economic softness. However, the Middle East conflict-driven surge in crude oil prices reversed this thesis, with higher energy costs creating inflationary pressures across developed economies. Central banks consequently signaled higher rates rather than cuts, causing the crowded short-duration trade to reverse sharply and inflict losses across the macro community.
The turbulent Q1 reflected broader market dislocations stemming from Trump administration policies. Following widespread tariffs implemented in 2025 that roiled global trade flows, the current year saw new shocks from military escalation in the Middle East. These external shocks created an unpredictable trading environment that tested the risk management and diversification approaches of even the most sophisticated hedge fund operators, with performance divergence highlighting the importance of nimble positioning and hedging discipline during periods of acute geopolitical uncertainty.
Despite the challenging backdrop, the industry's largest platforms demonstrated relative resilience. Ken Griffin's Citadel, flagship Wellington fund, declined 1.9% in March but maintained positive first-quarter returns. Izzy Englander's Millennium Management fell 1.2% during the month while still finishing Q1 in positive territory. Steve Cohen's Point72, which reported $50.7 billion in assets under management at the end of Q1 2026, was down less than 1% in March and achieved nearly 4% Q1 gains. Schonfeld Strategic Advisors, now managing $19 billion in total assets, demonstrated particular strength by posting flat March performance while advancing 0.9% for the year.
The core driver of March losses centered on a macro trade consensus that unraveled rapidly. Investors, including seasoned macro funds, had positioned for falling short-term interest rates in the United Kingdom and Europe, anticipating economic softness. However, the Middle East conflict-driven surge in crude oil prices reversed this thesis, with higher energy costs creating inflationary pressures across developed economies. Central banks consequently signaled higher rates rather than cuts, causing the crowded short-duration trade to reverse sharply and inflict losses across the macro community.
The turbulent Q1 reflected broader market dislocations stemming from Trump administration policies. Following widespread tariffs implemented in 2025 that roiled global trade flows, the current year saw new shocks from military escalation in the Middle East. These external shocks created an unpredictable trading environment that tested the risk management and diversification approaches of even the most sophisticated hedge fund operators, with performance divergence highlighting the importance of nimble positioning and hedging discipline during periods of acute geopolitical uncertainty.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.