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(Bloomberg) — Value Aligned Research Advisors, a New Jersey-based hedge fund with a philosophy and portfolio similar to Leopold Aschenbrenner’s Situational Awareness, fell 44% last month, whipsawed first by general pressure on artificial intelligence stocks, then by the volatility triggered by upheaval at its better-known rival.
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The losses pared the year-to-date returns for the $20 billion flagship AI Fund to 65% through July, according to a person familiar with the fund’s performance who asked not to be named because the information isn’t public. It was up nearly 200% through June, according to an investor document seen by Bloomberg News.
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In total, the firm managed about $26.4 billion at the end of June, 16 months after launching its hedge fund. Founded by Ben Hoskin and David Field, Value Aligned Research Advisors focuses on stocks likely to benefit from what they called the rise of “transformative AI.”
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VARA declined to comment.
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Both VARA and Situational Awareness are part of a niche group of hedge funds focused almost exclusively on the AI industry and in companies building out AI infrastructure, data centers and power. They have seen their fortunes swing as leveraged and crowded bets on such companies were tested last month from a barrage of margin calls.
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At the end of March, VARA shared 15 stocks with Situational Awareness, including top holdings such as CoreWeave Inc. and Bloom Energy Corp., according to regulatory filings. These common stocks make up about 93% of the value of the disclosed stock portfolio for Situational Awareness and about 27% of the same for VARA.
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Aschenbrenner’s rapid rise — from working as a researcher at OpenAI to building a $45 billion hedge fund in roughly two years and without an investment track record — was interrupted by spectacular losses in July. Faced with margin calls, the firm was forced to unwind trades and sell many of its holdings in publicly traded AI companies to Ken Griffin’s Citadel at a discount. Still, the firm has survived and is still making new investments.
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Before founding VARA, Hoskin, 35, worked as a derivatives trader at Watermark Group and as an equity analyst at BlackRock Inc. covering healthcare and tech companies. Field, 33, had been at Hudson River Trading as an algorithm developer, according to his LinkedIn profile.
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Hoskin received his master’s degree in mathematics and philosophy from University of Oxford where, according to LinkedIn, he was on the varsity pistol team and ran a martial arts society as an undergratuate. Field has a master’s degree in computer science from the Massachusets Institute of Technology, where as an undergraduate he studied both computer science and math.
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