AI-focused hedge fund VARA plunges 33% in October selloff
Value Aligned Research Advisors (VARA), a hedge fund heavily exposed to artificial intelligence stocks, suffered a 33% loss in October as a sharp selloff in technology shares triggered significant losses across concentrated AI investment strategies, according to a report by Bloomberg. The Princeton, New Jersey-based manager told investors holding Class C shares that its fund remained up 13%…
Value Aligned Research Advisors (VARA), an AI-focused hedge fund, experienced a 33% decline in October due to a technology sector selloff, according to a Bloomberg report. The New Jersey-based fund, which holds 13% year-to-date, disclosed the October setback to its Class C shareholders. VARA's losses intensified a 44% drop in July, underscoring the high volatility of leveraged AI investments.
The Nasdaq 100 plummeted 6.7% in October, its largest monthly decline in over 18 months, while the Philadelphia Semiconductor Index fell 12% on Thursday, intensifying selling pressure. Despite the market turbulence, VARA maintained financial stability, with no material changes to its counterparty relationships and sufficient excess margin.
The fund reported leverage at a historically low level. The drawdown signals growing challenges for hedge funds with concentrated AI portfolios, as heightened positions and leverage exacerbate losses during abrupt market reversals.
Written by urgent.news from Hedgeweek's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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