FX.co ★ 7 hedge funds that scored big gains during market turbulence

Renaissance Technologies

Renaissance Technologies LLC, an American hedge fund, has not been bruised in the market's recent turbulence. The company has been able to stay afloat during the crisis. Analysts say that this quantitative hedge fund has managed to survive the economic fallout thanks to its computer-based models that predict price changes in the stock market. Its strategy of betting on how equities will move helped the company log some of its biggest gains during the dot-com crash in 2000 and the 2008 financial crisis.

Pershing Square

Bill Ackman, the billionaire boss of Pershing Square, knows very well how to benefit from a crisis. He spent $27 million on credit default swaps, which soared to $2.6 billion at a time of rising corporate defaults on the back of COVID-19. The $2.6 billion gain helped offset losses in Pershing's equity portfolio and retained its share in corporations such as Hilton and Berkshire Hathaway. In March 2020, Pershing's net profit climbed by 11.1%.

Universal Investments

Universal Investments has become one of the leading hedge funds in terms of annual net profit. In April 2020, it posted a remarkable net return of 4,144%. The company primarily capitalizes on market shocks. Mark Spitznagel, a protégé of Nassim Taleb and the author of the popular book "The Black Swan", is an owner and chief investment officer of Universal Investments. Earlier, he worked at Taleb's former fund, Empirica Capital.

Crescat Capital

Crescat Capital can also boast of impressive returns generated during the pandemic. In the period between February 20 and March 20, 2020, it posted gains of 40.4% and 34.5% in two of its key funds. This was achieved mostly due to a well-elaborated plan. Kevin Smith, a chief at Crescat Capital, kept 50% of the fund's assets in cash and another 50% in stocks. He also invested in gold and silver in anticipation of a market downturn.

LongTail Alpha

In the first quarter of 2020, LongTail Alpha run by Vineer Bhansali, a former manager of the global investment company PIMCO, reported a profit of 400%. At the beginning of this year, the fund invested in stock and bond markets, hoping to increase profit from a spike in volatility. As a result, two of its flagship funds, LongTail Alpha, managed to take advantage of the shock situation in the market, fueling impressive returns.

Ruffer

Ruffer, a London-based investment fund, was also among the top-performing funds amid the crisis. At the beginning of this year, when the panic gripped the markets, the hedge fund made a profit of $2.6 billion, offsetting losses from other assets. Ruffer invested in derivatives tracking the VIX volatility index, which is often called Wall Street's "fear gauge." The fund actively invested in credit derivatives, gold, S&P 500, and Euro Stoxx 50 options.

Odey Asset Management

At the end of the first quarter of 2020, Odey Asset Management made an impressive profit during the market downturn. The flagship funds of the company had literally hit the jackpot on the background of COVID-19: the Swan Fund reported a profit of 20% in March and 8.3% in the first quarter of this year, while the Odyssey Fund gained 16% in March and 27.4% in the first quarter of 2020.