• The macro fund at "Tiger cub" Rob Citrone's Discovery Capital Management returned 48% in 2023, Bloomberg reported.

• The fund was one of the best-performing on Wall Street, weathering a tough year in markets.

• The volatile $1.5 billion fund staged a huge comeback after losing 29% in 2022.

Discovery Capital Management's macro hedge fund, led by "Tiger cub" Rob Citrone, saw a stunning 48% return in 2023, Bloomberg reported on Tuesday.

That's a sharp rebound from 29% loss posted by the fund in 2022. Its comeback made it one of the best performers on Wall Street, according to Bloomberg.

The $1.5 billion fund's performance was driven largely by long bets on equities and government bonds in Latin America, US credit, and both long and short bets on financial stocks, one source told Bloomberg.

It's not the volatile fund's first turnaround either. The fund, which has been around since 1999, soared 55% in 2020 after shedding 23% in 2019.

Discovery Capital's bets last year were strong enough to outperform the broader market, which was a tumultuous one. The Federal Reserve continued hiking interest rates at the fastest pace in four decades, sending the bond market careening into what ended up being a historic Treasury sell-off. The rate increases also moved mortgage rates sharply higher and created a wave of bankruptcies. Not to mention the three bank failures in March 2023, which also rattled markets.

But the past couple months have seen markets boomerang upwards, embarking on a monster rally since November. The gains have actually burned some hedge fund short sellers, who lost about 43% as stocks rebounded.

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