News Digest:

Big Tech and Unicorns, once the bearers of good tidings for the hedge funds have turned out to be the loss leaders for them in the first quarter of 2022. While the S & P Growth index fell by 8.8% in the first three months, the FAANGs were also in the red.

Takeaway:

According to Bloomberg “the megafunds failed to catch the market rotation spurred by inflation worries and a war in Europe, and that their size prevented them from being nimble. As a result, many ended up being stuck on the wrong side of numerous trade”. The rising inflation along with the war in Europe led to a volatility which seems to have caught most of them short.

While public stocks may prove easier for the funds to exit, the same may not be true for funds that have poured in huge Dollars in privately held companies. With many companies already marking down their valuation, getting their money out will be a challenge for the hedge funds in the privately owned Unicorns.

End Notes

Source: https://www.bloombergquint.com/business/tiger-cubs-suffer-brutal-reversal-amid-2022-s-market-tumult