AI selloff hits hedge funds; Asia managers lead losses

Global hedge funds suffered steep losses this week, battered by a violent unwind of AI-related bets, with Asia-focused funds hit hardest, according to a Goldman Sachs prime brokerage note. Global fundamental long-short funds lost money every day this week, with losses of 2.9% through October 15, though they remain up 14.3% year-to-date. Asia-focused stock pickers fell 2.6% on Wednesday, while tech-focused funds dropped 2.0%. Hotter-than-expected US inflation data fueled the selloff in semiconductor and AI supply chain stocks. Asia-focused stock pickers have lost 6.8% this month, erasing over half of their gains from a late-June peak when they were up more than 40% for the year.