Several leading global multi-strategy hedge funds recorded losses in March, relinquishing portions of the gains accumulated in the first two months of the year.

According to a Bloomberg report on April 2 citing informed sources, prominent multi-strategy firms including ExodusPoint, Balyasny, and Millennium all experienced negative returns in March. Analysts at JPMorgan noted that this hedge fund retreat represents the most significant since the market impact following the "Liberation Day" tariffs. Among the strategies, Commodity Trading Advisors (CTAs) saw their worst performance in nearly a year, while equity long-short funds with overweight positions in European stocks also recorded substantial losses.

However, a few winners emerged from the market turbulence. The Alpha fund managed by Kepos Capital and Switzerland's ADAPT Investment Managers both generated positive returns during this period of volatility, bucking the overall trend.

The core trigger for this market upheaval was the escalating conflict in the Middle East. Disruptions to shipping through the Strait of Hormuz directly pushed oil prices higher, fueling concerns about a resurgence of inflation. Investors reassessed the path of future interest rates, leading to a major sell-off in bond markets, while equity markets also weakened concurrently. The dual pressures of surging oil prices and declines in both bonds and equities made it difficult for multi-strategy funds, which rely on diversified asset allocation, to effectively hedge their risks.

As reported by Bloomberg, the multi-strategy hedge fund sector was among the hardest hit. Firms like ExodusPoint, Balyasny, and Millennium, which had significant exposure to areas such as European equities, faced concentrated selling pressure triggered by the sharp market swings.

Amid the widespread losses, some funds managed to achieve positive returns through differentiated strategies. Kepos Capital's Alpha fund and ADAPT Investment Managers stood out as rare winners. This highlights that during systemic volatility driven by geopolitical shocks, a fund's strategic positioning and risk exposure structure are decisive factors for its ultimate performance, leading to significant divergence within the market.