January 7, 2019 / 8:58 PM / 12 days ago

Hedge fund D.E. Shaw's flagship fund posts double-digit returns

BOSTON (Reuters) - Hedge fund D.E. Shaw’s flagship Composite Fund returned 11.2 percent last year, according to a person familiar with the numbers.

D.E. Shaw, which oversees roughly $50 billion, is one of a handful of firms to report double digit gains for 2018. Many hedge funds are reporting losses after the late-year stock market collapse caught them off guard.

In December the fund gained 3.5 percent, handily outperforming the S&P 500 which lost 9 percent during the month. For the year, the average hedge fund lost 6.7 percent according to early data from Hedge Fund Research and the S&P lost 6.2 percent. A spokesman for the firm declined to comment.

The Composite Fund pursues a mix of computer based and discretionary strategies and has notched double-digit returns in seven of the last 10 years. In 2017 the fund returned 10.3 percent. It has been closed to new investors since 2013.

D.E. Shaw was founded by computer scientist David Shaw and once employed Jeff Bezos, the founder of Amazon.

Hedge fund Bridgewater Associates’ flagship Pure Alpha Strategy, which has been run since 1991, also posted double digit returns for 2018, gaining 14.6 percent, after fees. Bridgewater oversees $160 billion in assets.

Renaissance Technologies, which also relies largely on computer-model driven trading, reported that its Renaissance Institutional Equities Fund gained 8.5 percent in 2018.

Meanwhile, Quest Partners told investors that its AlphaQuest Original fund, its flagship systematic macro program, ended the year with a 5.38 percent gain. The industry benchmark HFRI Macro:Systematic Diversified Index fell 7.61 percent.

Reporting by Svea Herbst-Bayliss; Editing by David Gregorio

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