AI stock slump in July hits hedge funds and indexes
AI stocks took a nosedive in July, and hedge funds felt it. The fund Situational Awareness was hit the hardest, losing 67% of its value and was forced to sell most of its investments at a discount.
PivotalPath's index, which tracks hedge funds trading technology, media and telecom stocks, also dropped 10%, while other big names like Whale Rock and Tiger Global saw smaller losses.
Citadel buys assets from Situational Awareness
While many funds struggled, Citadel stepped in and bought discounted assets from Situational Awareness, helping to steady the market.
Thanks to this move, Citadel's main fund jumped 5.9% for July and is now up 12% for the year.
Meanwhile, some funds like Whale Rock and Altimeter still managed impressive yearly gains (35.1% and 34%, respectively) even after all the turbulence.