Dan Sundheim’s D1 Capital Partners reported a difficult March, with its equities portfolio declining approximately 6%, placing the firm among the weaker-performing stock-focused hedge funds during the month, according to a report by Bloomberg citing unnamed sources familiar with the matter.
Losses were concentrated in the fund’s largest positions. Its top six holdings at the end of 2025 all delivered negative returns over the period, with industrials name Flowserve and building materials group James Hardie among the most significant detractors, falling 17% and 22%, respectively.
Despite the drawdown, D1 remains modestly positive for the year, up around 2.7%.
The broader environment proved difficult for equity-focused managers, as risk assets sold off sharply amid escalating geopolitical tensions in the Middle East. A surge in oil prices and heightened macro uncertainty triggered declines across both equities and fixed income, creating a more challenging backdrop for long-biased strategies.
Against this backdrop, several prominent hedge funds posted losses. Viking Global, Coatue Management and Maverick Capital each recorded mid-single-digit declines, while Tiger Global Management underperformed further with a drop of more than 7%.
Notwithstanding the weaker public equities performance, D1 has continued to attract investor capital. The firm recently raised $2.7bn for a new vehicle focused on private investments, alongside an additional $300m allocated to co-investment opportunities, allowing clients to participate in specific deals.
The firm has increasingly leaned into private markets in recent years. Approximately two-thirds of its $35bn in assets under management is now allocated to venture and late-stage growth investments, with the remainder deployed in public equities.
Performance in D1’s private portfolio has been a significant contributor to overall returns. A substantial position in SpaceX was a major driver last year, accounting for a large share of gains within the strategy.
The position benefited from a sharp increase in valuation during 2025, underscoring the growing importance of concentrated, high-conviction private investments within multi-strategy hedge fund platforms.
With SpaceX widely expected to pursue a public listing, market participants are closely watching how such positions may translate into realised returns and liquidity events in the coming periods.
The March drawdown highlights the sensitivity of concentrated equity portfolios to sector-specific and macro-driven moves, particularly in more volatile market environments.
