FIFTHDELTA, the $1.5bn hedge fund founded by former Citadel portfolio managers Niall O’Keeffe and Tio Charbaghi, generated an 8.6% return in July, capitalising on sharp market swings that caught many technology-focused managers off guard, according to a report by Bloomberg.
The report cites unnamed person familiar withe they results as highflying that the strong monthly performance followed a 5.6% gain in June, lifting the equity-focused fund to a year-to-date return of 7.5%. The rebound comes after the fund had been down more than 5% through the end of May.
A spokesperson for FIFTHDELTA reportedly declined to comment on the performance.
The July gains were driven by a combination of short positions in analogue semiconductor companies and investments linked to the industrial and automotive sectors. The fund also benefited from long positions in coatings and paints businesses, selected automotive parts manufacturers and cyclical industrial companies.
The performance contrasted with a difficult month for many hedge funds exposed to the AI trade. Global equity markets retreated after reaching record highs in early June as investors reassessed technology valuations against a backdrop of geopolitical uncertainty and the conflict involving Iran.
Several technology-focused hedge funds posted significant losses during the sell-off, including Coatue Management, while AI-focused hedge fund Situational Awareness suffered one of the industry’s largest drawdowns after being forced to liquidate billions of dollars of technology holdings to meet margin calls.
Launched in July 2021, FIFTHDELTA raised $1.3bn at inception and closed to outside investors immediately, making it Europe’s largest hedge fund launch that year. Since then, the fund has delivered predominantly double-digit annual gains, interrupted by a single negative year in 2023.
Preliminary industry estimates suggest performance across hedge fund strategies was mixed in July. Quantitative manager Quantedge gained 7.8% during the month to take its year-to-date return to 34.6%, while macro specialist Pharo Capital advanced 0.23%, leaving it up 9.9% for the year.
Among the larger multi-strategy firms, Millennium Management fell 2.1% in July but remained up 8.2% year to date. LMR Partners slipped 0.48%, while systematic strategies struggled, with Marshall Wace’s TOPS fund declining 2.59% and its Eureka fund losing 6.91%.
Technology-focused Coatue Management was among the weakest performers, falling 8.3% in July, although it remained ahead 14.3% for the year.
