February 20, 2024

Signage for Citadel Funding Group LLC hangs outdoors their workplace in Chicago, Illinois, U.S.

Bloomberg | Getty Photographs

The world’s high hedge funds raked in report 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 through the pandemic-era rally of 2021, in accordance analysis Monday from LCH Funding, a fund of hedge funds.

General, the fund administration business recorded positive aspects of $218 billion after charges, based on 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 business’s belongings.

Included among the many finest performers have been Christopher Hohn’s TCI, Ken Griffin’s Citadel and Andreas Halvorsen’s Viking.

Agency Belongings (billion) Web 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 Road $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, mentioned that the main funds have been buoyed by the inventory market’s “incredible run” in 2023. Nevertheless, he added that many additionally showcased particularly savvy inventory choice methods.

“You can argue that, since shorting is such a difficult sub-strategy, conserving issues long-biased and having a concentrated place in top quality positions has been the way in which to go,” Amiee informed 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 have been Alphabet, Canadian Nationwide Railway, Visa and Normal 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 aspects since inception rank it as probably 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, properly above the $655.5 billion in whole managed belongings.

A hedge fund is a restricted partnership of personal buyers whose cash is managed by fund managers. Hedge funds are usually know for investing in increased danger and extra non-traditional belongings in comparison with mutual funds.