Hedge funds faced their worst monthly performance in over four years in March 2023, with average declines of just over 5%, marking the steepest drawdown since January 2022. This downturn was largely influenced by heightened volatility stemming from geopolitical tensions related to the Iran conflict, as well as significant cross-asset dislocations. Asia-focused funds were the hardest hit, followed by those in Europe and the United States. The rapid market shifts forced many hedge funds to de-risk, exacerbating losses and revealing vulnerabilities in crowded positions. While equity markets posted moderate declines, hedge funds had to unwind global equity exposure at unprecedented rates, particularly in North America. Notably, technology, media, and telecommunications sectors were among the worst performers. In contrast, systematic and quantitatively driven strategies managed to generate gains, demonstrating resilience amid broader market declines. This situation underscores the sensitivity of hedge fund strategies to geopolitical shocks and rapid changes in market conditions.