Key facts
- Millennium lost 2.1% in July, with year-to-date returns at 8.2%.
- Dymon Asia and Pinpoint Asset Management saw July losses of 6.5% and 9% respectively.
- Situational Awareness, an AI-focused fund, experienced a 67% loss in July.
- Citadel acquired a significant portion of Situational Awareness's portfolio.
- The S&P 500 index closed July down 0.1%.
Hedge funds navigated a turbulent July, with several major players experiencing significant losses. Izzy Englander's Millennium saw a 2.1% decline last month, bringing its year-to-date returns to 8.2%. Asia-based funds Dymon Asia and Pinpoint Asset Management fared worse, falling 6.5% and 9% respectively in July, leaving them with year-to-date gains of 7.5% and 6.3%. These declines were attributed to a confluence of factors including skepticism surrounding artificial intelligence, ongoing disruptions in energy markets due to conflict in Iran, and the Federal Reserve's monetary policy under its new chairman. The situation was exacerbated by the dramatic collapse of Situational Awareness, a $45 billion fund focused on AI companies, which lost 67% in July. Margin calls forced its manager, Leopold Aschenbrenner, to sell its public equity book. Citadel's subsequent purchase of the majority of this portfolio reportedly helped stabilize markets, contributing to the S&P 500 index finishing July down only 0.1%, despite the tech stock surge following Citadel's intervention. Other funds like Man Group 1783, LMR, and North Rock also reported modest July losses.