News

By Nell Mackenzie

LONDON (Reuters) -Billionaire investor Cliff Asness’s AQR Capital Management finished 2023 with double digit returns in several of its funds, buoyed by stock selection, bonds, European natural gas and iron ore, a source familiar with the matter said on Thursday.

The $99 billion investment manager, known for its quantitative strategies, returned a net 18.5% for the year in its AQR Absolute Return strategy, its longest running multi-strategy, the source familiar with the firm’s performance said.

This compared with an almost 44% net return in 2022, the source said.

Stock selection and in particular, value investing helped explain last year’s success for AQR’s fund, the source added.

Asness predicted in January 2023 that this kind of investing which means “going long cheap companies and shorting expensive ones” within certain sectors would be “unusually attractive” for the year.

A short position is a bet an asset price will fall in value.

AQR Apex Strategy, a newer multi-strategy fund, also benefited from positive stock trades as well as success from some economic trends said the source, posting a net 16.2% performance versus 17.1% in 2022.

Generally, systematic hedge funds and particularly those trading trends had a choppy year. The effects of global interest rate hikes trickled through economies and markets in 2023, with a banking crisis, and soaring bond yields taking many by surprise.

Hedge funds in 2023 averaged a 5.7% return in the year through November, according to hedge fund research firm PivotalPath. Equities and credit-focused strategies were the best performers, while macro and managed futures lagged.

But AQR’s alternative-trend following Helix Strategy returned a net 14.3% in 2023 versus 49.1% in 2022 and saw tailwinds in bonds and commodity markets such as iron ore, European natural gas and power prices, said the source.

The AQR Equity Market Neutral Global Value strategy returned a net 20.6% in 2023 versus a 44.7% return in 2022.

Bloomberg first reported the news of the performance earlier on Thursday.