Fiszel’s Honeycomb Hedge Fund Down 4% in 2021: Hedge Fund Update

(Bloomberg) -- So much for a calm 2021. January kicked off with chaotic markets as Reddit-inspired retail investors banded together to spark a rally in beleaguered stocks that were among the most-shorted in hedge fund land.

Now, details of the damage are coming in. Melvin Capital Management took the biggest known hit thus far, sinking 53% after its aggressive and leveraged short on GameStop Corp. Maplelane Capital fell 45% through Jan. 27, Bloomberg previously reported. Other funds have been dragged down by the resulting broader market havoc.

Meanwhile, the S&P 500 fell 1.1% last month.

Key Developments:

• Fiszel’s Honeycomb fell 4% in January
• Renaissance’s RIEF fund slumped 9.5% last month

Fiszel’s Honeycomb Hedge Fund Fell 4% Last Month

David Fiszel’s $1.2 billion Honeycomb Asset Management lost about 4% last month, according to people with knowledge of the matter. That follows a gain of 58% for the Master Fund in 2020.

The fund wagers on and against stocks and also makes select private investments. Honeycomb has discussed with investors launching a long-only fund this year, the people said.

A spokeswoman for New York-based Honeycomb, which was founded in 2016, declined to comment.

Renaissance Quant Fund Slumps 9.5% (10:36 a.m. NY)

A Renaissance Technologies stock fund slumped in January, adding to the quant-investment giant’s woes after it suffered heavy losses in pandemic-hit markets.

The Renaissance Institutional Equities Fund fell 9.5% in the month, according to people with knowledge of the matter, who asked not to be identified because the information is private. That follows a 20% loss last year for the fund, which is the largest of three that the firm sells to outside investors.

A spokesman for the East Setauket, New York-based firm founded by billionaire mathematician Jim Simons declined to comment.

The setback for one of the industry’s best-known hedge fund firms underscores the continued troubles for quant firms. Their trading models were thrown off by market swings as Covid-19 battered the global economy and central banks unleashed unprecedented stimulus to contain the carnage.

Renaissance, which oversees $60 billion, has dropped out of a ranking of the world’s 20 most profitable hedge fund firms after some of its public funds fell more than 30% last year. It’s not clear what caused the Institutional Equities Fund’s January loss, which compares with a 1% drop in the S&P 500 index.

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Renaissance is best known for its Medallion fund, which is only open to employees and has annualized gains of roughly 40% over the past three decades. While Medallion employs a short-term trading strategy, the Institutional Equities Fund tends to hold its stock positions for weeks or months, trades only U.S.-listed shares and is biased toward stocks its models expect to rise.

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