March was rough for major hedge funds, with many facing losses. After a shaky start to 2026, some big names are still trying to shake off the drag. Still, some funds held steady, showing resilience despite the market's ups and downs.

Rough March for Hedge Funds

Dmitry Balyasny’s $33 billion hedge fund dropped 4.3% in March, pushing its year-to-date loss to 3.8%, according to sources familiar with the firm. ExodusPoint, led by Michael Gelband and known for its fixed-income focus, lost 4.5% last month. London-based LMR Partners shed 2.4% in its multistrategy fund.

Still, not every firm took a hit. Schonfeld Strategic Advisors, managing $19 billion, stayed flat in March and posted a modest 0.9% gain for the year so far. Asian multistrategy players Dymon Asia and Pinpoint Asset Management lost 4.3% and 2.5% in March but remain positive for 2026.

Market Turmoil Drives Volatility

The market in 2026 has been unpredictable. Geopolitical tensions have made the market nervous. The strikes on Iran by US and Israeli forces shook global economies, fueling fears of rising energy costs and inflation.

Macroeconomic bets in Europe and the UK backfired, particularly trades betting on lower short-term interest rates. Rising energy prices, driven by Middle East conflicts, pushed inflation expectations up, leaving many hedge funds caught on the wrong side.

Meanwhile, the tech sector experienced a sell-off earlier in the quarter, partly due to excitement around artificial intelligence advancements from startups like Anthropic. The S&P 500 suffered its worst quarter since 2022, falling 4.6%.

Multistrategy Funds Under Pressure

Lately, multistrategy hedge funds, which spread investments across different strategies to steady returns, have drawn attention. They’re known for handing out hefty paychecks to top traders, managing massive pools of capital.

Yet, even these diversified funds have faced losses. The mixed performance in March highlights the challenges of delivering steady gains amid unpredictable global markets.

New Hedge Fund Models Face Challenges

Taproot Management, a new hedge fund launched last summer with $250 million from the Canadian pension giant CPPIB, is aiming to disrupt the multistrategy space by cutting costs. Instead of relying on expensive portfolio managers, it uses experienced analysts feeding ideas into a computer algorithm that makes the final call.

But Taproot hasn’t found its footing yet. It lost about 1% in its first six months and continued to bleed money in early 2026. The fund also saw its director of research, Kevin Merritt, exit in March.

Taproot’s approach echoes strategies like Marshall Wace’s TOPS, which also blend human input with algorithmic decision-making. But the quant space has been tough lately, with big names like Renaissance Technologies reporting losses this year.

Wider Implications for Investors

Hedge funds have struggled early this year as investors deal with geopolitical risks, inflation, and changing markets. Traditional macro bets are harder to predict, and tech sector swings add another layer of complexity.

Plus, the rising costs of talent and operations in hedge funds put pressure on returns. Taproot’s experiment signals a push to lower fees, but it’s clear that turning a profit in this environment is no easy task.

Investors are now watching to see if multistrategy funds can adjust or if newer, more efficient models will find success.

March showed that even the largest hedge funds can’t avoid global shocks. As markets stay unsettled, it’s unclear which funds will come out on top in the coming months.