(Bloomberg) -- Two Sigma Investments’ Compass Enhanced fund fell 16% last year as macro-focused hedge funds struggled with economic uncertainty.   

The firm’s Compass fund fell 6%, according to people familiar with the matter. Two Sigma’s Absolute Return Enhanced fund, which trades across various strategies, gained 12% last year. Its equity quant fund, Spectrum, rose 8.6%. 

A spokesperson for the New York-based quant giant declined to comment. 

Many macro firms wrestled last year with elevated interest rates and doubt over when the Federal Reserve will shift its policy. The collapse of Silicon Valley Bank in March rippled through global markets and especially hurt interest-rate bets many hedge funds had made early in the year.  

The PivotalPath Global Macro Index — which tracks hedge funds that wager around global economic trends — rose just 1.3% last year. Investors pulled almost $9 billion from macro hedge funds through November, according to data provider eVestment. 

Two Sigma, which manages about $60 billion, had a tough 2023. 

The firm disclosed that a rift between its billionaire founders could pose a risk to clients, and it put a researcher on leave after the employee was accused of tampering with its models. Two Sigma also faced internal frustrations at its private equity impact-investing unit, which was ultimately spun out. 

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