Armistice Capital’s flagship hedge fund suffered its steepest monthly loss since inception, plunging 18.4% in March, as volatile markets and steep declines in healthcare and consumer stocks hammered performance, according to a report by Bloomberg.
The sharp drawdown marks the worst month for Steven Boyd’s New York-based firm since it launched the strategy in 2012. The flagship fund, which managed around $2.1bn at the beginning of the year, focuses on small- and mid-cap healthcare and consumer names—segments that were particularly vulnerable as equity markets broadly repriced risk last month.
The report cites an investor letter seen by Bloomberg as revealing that fund’s Q1 losses were largely driven by positions in names such as Travere Therapeutics and Incyte Corp, both of which slumped more than 15% in March. The broader S&P 500 fell 5.75% during the month, while a healthcare hedge fund index tracked by PivotalPath dropped about 5%.
The firm declined to comment on the March performance.
Like many equity-focused hedge funds, Armistice was hit as investors de-risked portfolios amid growing concerns over the escalating US trade war under President Donald Trump. Crowded trades were unwound, leverage was trimmed, and liquidity in small-cap names became increasingly scarce.
The fund, which had previously delivered annualised gains of 24% prior to this year, has seen redemptions pick up since 2023, according to sources familiar with the matter. In response, Armistice has created multiple liquidating share classes to manage less liquid positions.
These side pockets – designed to segregate hard-to-sell assets – have had a mixed performance. One launched in 2023 lost 39% last year, while another formed in October posted a 9% gain in Q4 2024, followed by a 14.6% loss in the first two months of 2025. Notably, these vehicles outperformed the flagship fund in March, according to an Armistice representative.
The firm’s move to limit immediate redemptions – returning only 32% of capital in cash to some exiting investors – highlights the liquidity challenges faced by stock-picking hedge funds amid a rapidly shifting macro backdrop.
