MM unwind?
Heard millennium at -2%, p72 -4% and citadel -1%. Can anyone confirm these numbers? Very bad quarter for pod shops. Been hearing HSD# teams at P B C are getting axed, mostly TMT
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Based on the most helpful WSO content, there isn't a direct confirmation of the exact YTD performance numbers for Point72, Millennium, or Citadel in the current context. However, there are mentions of challenges faced by multi-manager (MM) hedge funds, including Point72, in various periods. For example:
Point72's Struggles: In January 2021, Point72 reportedly faced a 10-15% loss during a tough market period, as noted in the "State of Market – Jan 2021" thread. This aligns with the narrative of volatility and underperformance in certain MM strategies.
Millennium and Citadel: Millennium is often highlighted for its strong business model but also for its high turnover of portfolio managers, with 90% reportedly gone within three years. Citadel, on the other hand, has been noted for its relative outperformance in some contexts, but no specific YTD figures are provided.
Team Cuts: There are references to teams being cut at MMs, particularly in underperforming sectors like L/S equity. For instance, in the "It's getting ugly out there" thread, risk managers are forcing books to be cut down, and L/S equity is described as "pretty much dead."
While the exact numbers you mentioned (-4% for Point72, -2% for Millennium, and -1% for Citadel) aren't explicitly confirmed, the broader context suggests that MMs have faced significant challenges, leading to team reductions and performance struggles in certain strategies. If you're looking for precise figures, it might be worth checking recent fund reports or industry updates.
Sources: An Overview of Technology Media and Telecom (TMT) - Part 1 of 2, An Overview of Technology Media and Telecom (TMT) - Part 1 of 2, Are market-neutral hedge funds (Point72, Citadel) the place to be for 2022 and beyond?, An Overview of Technology Media and Telecom (TMT) - Part 2 of 2, 2021 S&T Bonus
-1% to -2% in a giant unwind for these guys is very good. if that is the downside i think its a positive data pt for pod shops
sorry, these are all pre crash figures. mar 31 ytd.
thought they were supposed to be mkt neutral
mkt neutral =/= vol, tail, liquidity, cash, factor neutral lol
How are the pods doing since April 2nd? Haven’t seen anyone discuss this in other threads
They’re dead.
Everyone got fired. Heard that Ken jumped out of his penthouse. Your bank hiring?
Pods blowing up today
surely apr 3 was an absolute blood bath for L/S ?
i wonder what effects it had on macro teams - some mustve made a killing
My stocks that I know are good factor shorts (so pods short it not bc they know the idio story more to match factors with their crowded longs) did well yesterday, which a signal of degrossing I think.
Tl;dr he's agreeing that pods are blowing up
Interesting. What would you consider a factor short? Something like a ServiceNow short paired up with another large cap name like Microsoft?
No, not obvious at all. People much more de-grossed and guarded than a month ago.
.
Enjoy a long and fulfilling career in banking
Enjoy the next week of employment.
lol what’s the point of this thread? Are some pods blowing up? Yes. In other news, the pope is catholic.
This is the game everyone knows they’re playing when they enter the MMHF world. Some others at C/M/P will make generational money in this period too.
Analysts in IB still don't understand the model, apparently.
I think there should be a mandatory basic industry literacy test before people are allowed to post on the forum.
It seems like there is so much hatred towards the pods.
“chaos is a ladder”
esp true in the pod world
cringe
i’m pretty uneducated on the mmhf structure — when people are saying pods at C / M / P / B are blowing up, is this a risk to the firms as a whole or just specific pods because i imagine some of the other strategies at these hfs had to have made money today
Specific
lol people in this thread clearly don’t work in the industry
Enlighten us
I’m good
Imagine what it’ll look like now. Lots of people about to get canned
Maybe you’ll even have to write down a shitco or two this yr 🤣
-hurt
I’d much prefer to write down a shit co and keep trucking along bud vs suffer swift, massive losses. This bad news for everyone.
The pods are fine. It’s the duration guys/single managers that took massive, massive pain last week and are in for another beating this week. Hearing some really bad numbers. It’s bad
give us some numbers
Avala down 14% in March ouch
I don't think you underestand the economics of pod shops - a pod shop being "flat" for the year PnL-wise will be -10% to investors - maybe even more in a very high dispersion year. So yes pods are hurting right now
Yes, netting is big cost to LPs (esp in high dispersion year as you noted), but the returns publicized in bloomberg articles etc are all already net of fees and expenses. So, flat is flat. It's already a 1-to-1 comparison. But idk how it works with the timing of fees/expenses, obviously bonuses aren't paid out proportionally throughout the year.
So actually maybe I'm partially wrong. At least the EOY return numbers are always net and apples to apples.
To add a little more colour and specifics to the thread; there were a couple articles out in Mar detailing the underperformance of some of the major HFs in Feb. The primary reason for this was that the index-rebal arb pods took some heavy losses. I've personally never traded it, but I understand the mechanics. If you have a L/S book where you're long the expected names to be added, and short the ones that are expected to be deleted, before the trade gets crowded, then you can do well. The main risks of this strategy are: a) being too late, and the arb has already happened, b) picking the wrong names, c) picking the right names, but purely due to market forces/sector peformance/idiosyncratic risks, your positions go against you, because you may not be market neutral, and you could just be be outright unlucky. From what I gather, the reason this time was c), because the markets were acting pretty strangely during Feb.
Now, the above applied to Feb. I believe this is different from what's happening at the moment with the tariff sell-off. Thinking more broadly, if you crudely categorise all strategies/pods into 2 buckets: long vol e.g. trend-following/momentum, or short vol e.g. mean-reversion. At any given time, a HF will have a tilt towards one or the other, even if the fund maybe "market neutral". So simply put, if you see a large sell-off in the market, vol spikes, and the HF loses money (or makes money), then it's not necessarily to do with whether they're market neutral, it's probably to do with what class (long vol vs short vol) of strategies/pods they have more weighting in at that point in time..
this makes a lot of sense, thank you
Excellent explanation. Thank you.
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