Background After graduating from
Northwestern University with a degree in
economics in 2001, Gabriel Plotkin joined
Ken Griffin's hedge fund
Citadel, and later
Connecticut-based hedge fund North Sound Capital. Prior to starting Melvin Capital, Plotkin was a trader at
Steve Cohen's
SAC Capital, where he managed a portfolio of mostly consumer stocks valued at about $1.3 billion. During his time at SAC Capital, Plotkin allegedly received emails containing illegal insider information, but was not charged with any wrongdoing. Plotkin described the fund to
Bloomberg as "a very human-intensive place. We have a lot of analysts, we require a lot out of them." He also said that the fund has an "intense focus" on the short side (i.e.
short selling). In its first full year in operation, Melvin Capital had returns of 47%, ranking it 2nd in
Bloomberg's 2015 list of top-performing funds with $1 billion or more in AUM. These returns were several times that of
Steve Cohen's current hedge fund,
Point72, in the same year. In 2015, nearly two-thirds of the fund’s 67% returns (before fees) derived from its short positions. Notable investments included
Chewy,
Amazon,
Las Vegas Sands,
Alibaba, and shorting
GameStop. The fund had returns of 44% in 2019. At the end of 2020, it was reported to have made returns of 52%, making it one of the highest-performing hedge funds. It consistently remained one of the top performing hedge funds until 2021. In January,
Citadel and Point72 invested $2.75 billion in Melvin in exchange for non-controlling revenue shares of the fund. CNBC's
Andrew Ross Sorkin reported that Melvin Capital had closed (i.e. covered) its short position in GameStop on January 26 in the afternoon, although CNBC could not confirm the amount that Melvin Capital lost. Melvin Capital also refuted rumors that the fund intended to file for bankruptcy. On January 27
Bloomberg News reported that losses had continued past the 30% reported on January 24 by
The Wall Street Journal (
WSJ). The fund had also repositioned its portfolio according to the source. Through the end of January 2021, the fund was down 53%, according to
WSJ. In February, Melvin posted a 22% gain; even with this addition, Melvin would need to produce an additional 75% gain for earlier clients before breaking even. At the end of Q1 2021, Melvin reported losses of 49%; Allegations included Melvin's participation in a conspiracy against retail investors, and also that Melvin "made misstatements about their role in the conspiracy to the public." Melvin contended that these lawsuits were "without merit".
2022 In May 2022,
Bloomberg News reported that Melvin Capital planned to close its funds and return the cash to its investors by June 30. == Executives ==