(Adds details on Pershing Square, other funds' returns)
By Svea Herbst-Bayliss and Jennifer Ablan
April 2 (Reuters) - Activist investor William Ackman, who has spent $1 billion betting that Herbalife is a fraud, delivered double digit returns to his investors during the first quarter even as many rival hedge funds posted only small gains or even losses.
In a note to investors, Ackman reported on Wednesday that his flagship Pershing Square LP fund gained 10.7 percent during the first quarter even after the fund slipped 0.6 percent last month, several people familiar with his returns said. Those people were not authorized to speak on the record.
The gains signal a dramatic comeback for one of Wall Street's most closely-followed investors after losses at J.C. Penney and a sharp run-up in Herbalife's stock price, which hurt short-sellers, weighed on the $13 billion firm's returns.
Ackman has said Herbalife runs a pyramid scheme, something the company has steadfastly denied.
Last month news that the U.S. Federal Trade Commission is probing Herbalife sent the weight loss and nutrition company's share price down, helping Ackman's fund. Gains on his investments in mortgage lenders Fannie Mae and Freddie Mac, plus Beam and Howard Hughes also boosted returns.
Ackman's first quarter returns stand in stark contrast to some of his rival's more muted gains at a time the Standard & Poor's 500 index gained only 2.37 percent.
Many hedge funds are still compiling their final numbers and investors said they had seen on a trickle of data.
Something that hurt many hedge funds, especially tech oriented portfolios, was a sharp sell-off in technology stocks and some jitters over how quickly the Federal Reserve may raise interest, analysts said.
Daniel Loeb's Third Point Offshore Fund, now waging a proxy contest at auction house Sotheby's and perennially one of the industry's best performers, inched up 0.9 percent in March to end the quarter with a 3.3 percent gain.
David Einhorn's Greenlight Capital, which has a big position in IPhone maker Apple, eked out a 0.2 percent gain in March. But it was not enough to wipe away the year's losses which now stand at 1.1 percent, an investor said.
When stocks including Netflix and Google took a beating during the middle of last month, a number of prominent funds took a beating.
John Thaler's JAT Capital Management, which owned those companies plus Pandora Media Inc and Facebook at the end of the fourth quarter, lost 9 percent during the month and is now off 5.6 percent for the year, an investor said. Last year the fund was up 30.6 percent.
Philippe Laffont's Coatue Management also owned big tech names and lost 8.7 percent in March, leaving the fund down 7.4 percent for the year, an investor said.
Jitters about global growth also impacted trading. Global macro fund Autonomy, which manages $3.3 billion, gained 2.08 percent last month and is up 3.3 percent for the year.
Multi-strategy firm Hutchin Hill, which oversees $1.4 billion, posted a 1.64 percent gain in March for a 5.09 percent gain for the year, a person familiar with the number said.
Distressed investor Maglan Capital was up roughly 1 percent in March and is up 11 percent for the year. (Reporting by Jennifer Ablan; Writing by Svea Herbst-Bayliss; Editing by Dan Grebler, Bernard Orr)