Signage for Citadel Investment Group LLC hangs outdoors their workplace in Chicago, Illinois, U.S.
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The world’s high hedge funds raked in record earnings final year 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 in the course of the pandemic-era rally of 2021, in accordance research Monday from LCH Investment, a fund of hedge funds.
Overall, the fund administration trade recorded features of $218 billion after charges, in accordance with LCH Investments estimates.
The high funds — recognized as these which have carried out greatest in greenback phrases since their inception — accounted for round one-third of annual earnings final year, regardless of managing lower than a fifth (19%) of the trade’s belongings.
Included among the many greatest performers have been Christopher Hohn’s TCI, Ken Griffin’s Citadel and Andreas Halvorsen’s Viking.
Top 20 managers by 2023 earnings
| Firm | Assets (billion) | Net earnings since inception (billion) | 2023 earnings (billion) | Launch year |
| 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 Square | $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 Street | $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 |
Source: LCH Investments
LCH Investments’ director and head of research, Brad Amiee, stated that the main funds have been buoyed by the inventory market’s “implausible run” in 2023. However, he added that many additionally showcased particularly savvy inventory choice methods.
“You might argue that, since shorting is such a difficult sub-strategy, retaining issues long-biased and having a concentrated place in prime quality positions has been the best way to go,” Amiee told the Financial Times.
TCI, the highest rating fund, recorded investor earnings of $12.9 billion and ended final year up 33%, beating the S&P 500’s 24% acquire.
Included in its largest holders have been Alphabet, Canadian National Railway, Visa and General Electric.
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 features since inception rank it as probably the most profitable hedge fund in historical past.
The research 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 belongings.
A hedge fund is a restricted partnership of non-public traders whose cash is managed by fund managers. Hedge funds are usually know for investing in greater threat and extra non-traditional belongings in comparison with mutual funds.