Major Hedge Funds Face Sharp March Losses As Middle East Turmoil And Inflation Fears Rattle Global Markets

Top hedge funds like Balyasny and ExodusPoint report March losses as Iran strikes and inflation fears drive the worst S&P 500 quarter since 2022.

By: AXL Media

Published: Apr 3, 2026, 4:27 PM EDT

Source: The information in this article was sourced from Business Insider

Market Turbulence Erodes Multistrategy Gains

The hedge fund industry encountered a grueling end to the first quarter as March volatility erased gains for several high profile investment managers. Dmitry Balyasny’s eponymous firm reported a 4.3% decline for the month, dragging its annual performance into negative territory at 3.8% down. This downturn highlights the increasing difficulty even diversified multistrategy funds face when global market correlations tighten during periods of acute geopolitical stress and sudden macroeconomic shifts.

Geopolitical Conflict Catalyzes Global Economic Shifts

The primary driver of the recent market instability stems from military strikes involving American and Israeli forces against Iran, which have sent energy prices soaring. These regional tensions have upended previous inflation forecasts, forcing a painful reassessment of interest rate trajectories in the United Kingdom and Europe. Macro funds that had positioned themselves for imminent rate cuts saw those bets backfire as rising oil costs signaled that central banks may keep rates elevated to combat renewed inflationary pressures.

Resilience Among The Industry Giants

While the broader space struggled, the largest players in the hedge fund world managed to mitigate the worst of the damage. Ken Griffin’s Citadel reported a 1.9% dip in its flagship Wellington fund for March, while Izzy Englander’s Millennium fell by 1.2%. Despite these monthly setbacks, both firms concluded the first quarter with overall positive performance. This relative stability during a chaotic period underscores the defensive capabilities of the industry’s most capitalized firms in a year already defined by shifting trade policies and military conflict.