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In the week ending January 27th 2023, HFR reported that hedge funds gained in the fourth quarter to conclude a volatile year, with managers navigating a complicated dynamic of macroeconomic and geopolitical risks driven by generational inflation, sharp increases in interest rates, falling equity markets, a weakening global economy, an uncertain trajectory of pandemic/quarantine impacts and the collapse of the cryptocurrency market. Total global hedge fund capital finished the year at $3.83 trillion, a quarterly increase of $44 billion, as reported today by HFR, in the latest release of the HFR Global Hedge Fund Industry Report.

Credit hedge funds had a rough time in 2022 - but not nearly as rough as what the equity long-short crowd went through. The overall index was down - but several well-known funds finished the year slightly in the black. The Gapstow Alternative Credit Index lost 3.9 percent last year, despite gaining 1.6 percent in the fourth quarter.

Meanwhile, hedge funds endured their third-worst year of outflows in about 15 years in 2022, as the Federal Reserve's rapid-fire rate hikes rattled investors and pulled down asset prices, according to a new tally of fund flows by eVestment.

In performance news, value investor David Einhorn's hedge fund Greenlight Capital returned 36.6%, helped by short positions in a group of high-flying stocks, some winning long positions in the coal sector and Twitter; Light Street Capital Management's hedge fund tumbled 54% in 2022. That drop rivals the 56% decline for Tiger Global Management, and is steeper than Lone Pine Capital's 36% loss and Whale Rock Capital Management's 45% slide, while the Arini Credit Master Fund, run by former Credit Suisse Group AG trader Lemssouguer, ended the year up 5.7%, according to people with knowledge of the matter.

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