Signage for Citadel Funding Group LLC hangs outdoors their workplace in Chicago, Illinois, U.S.
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The world’s high hedge funds raked in file earnings final yr amid a resurgence in inventory markets, new evaluation confirmed.
The 20 main fund managers made $67 billion in investor earnings in 2023, up from the $65 billion recorded throughout the pandemic-era rally of 2021, in accordance analysis Monday from LCH Investments, a fund of hedge funds.
General, the fund administration trade recorded positive factors of $218 billion after charges, in accordance with LCH Investments estimates.
The highest funds — recognized as these which have carried out finest in greenback phrases since their inception — accounted for round one-third of annual earnings final yr, regardless of managing lower than a fifth (19%) of the trade’s property.
Included among the many finest performers had been Christopher Hohn’s TCI, Ken Griffin’s Citadel and Andreas Halvorsen’s Viking.
High 20 managers by 2023 earnings
| Agency | Belongings (billion) | Internet earnings since inception (billion) | 2023 earnings (billion) | Launch yr |
| TCI | $50 | $41.3 | $12.9 | 2004 |
| Citadel | $56.8 | $74 | $8.1 | 1990 |
| Viking | $30.5 | $40.9 | $6 | 1999 |
| Millennium | $61.9 | $56.1 | $5.7 | 1989 |
| Elliott | $62.2 | $47.6 | $5.5 | 1977 |
| DE Shaw | $43.8 | $56.1 | $4.2 | 1988 |
| Lone Pine | $15.9 | $35.6 | $4.2 | 1996 |
| Baupost | $27.4 | $37 | $3.8 | 1983 |
| Pershing Sq. | $17.9 | $18.8 | $3.5 | 2004 |
| SAC/Point72 | $31 | $33 | $3 | 1992 |
| Appaloosa | $17 | $35 | $2.7 | 1993 |
| Farallon | $40.4 | $35.7 | $2.6 | 1987 |
| Och Ziff/Sculptor | $28.7 | $32.2 | $2.3 | 1994 |
| Egerton | $14 | $23.9 | $2.3 | 1995 |
| David Kempner | $37 | $21 | $1.8 | 1983 |
| King Avenue | $9.5 | $19.5 | $0.9 | 1995 |
| Brevan Howard | $35.6 | $28.5 | $0.4 | 2003 |
| Caxton | $13.4 | $19.5 | $-0.3 | 1983 |
| Bridgewater | $72.5 | $55.8 | $-2.6 | 1975 |
| Soros | N/A | $43.9 | N/A | 1973 |
Supply: LCH Investments
LCH Investments’ director and head of analysis, Brad Amiee, stated that the main funds had been buoyed by the inventory market’s “incredible run” in 2023. Nevertheless, he added that many additionally showcased particularly savvy inventory choice methods.
“You could possibly argue that, since shorting is such a difficult sub-strategy, maintaining issues long-biased and having a concentrated portfolio of top of the range positions has been the way in which to go,” Amiee advised the Monetary Instances.
TCI, the highest rating fund, recorded investor earnings of $12.9 billion and ended final yr up 33%, beating the S&P 500’s 24% acquire.
Included in its largest holders had been Alphabet, Canadian Nationwide Railway, Visa and Common Electrical.
Citadel, which ranked second in 2023, made $8.1 billion in earnings after bringing in a record-breaking $16 billion in 2022. Its $74 billion in positive factors since inception rank it as essentially the most profitable hedge fund in historical past.
The analysis additionally discovered that the highest 20 funds have made a mixed $755.4 billion in earnings since inception, effectively above the $655.5 billion in whole managed property.
A hedge fund is a restricted partnership of personal traders whose cash is managed by fund managers. Hedge funds are usually recognized for investing in greater threat and extra non-traditional property in comparison with mutual funds.