Signage for Citadel Funding Group LLC hangs exterior their workplace in Chicago, Illinois, U.S.
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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.
Total, the fund administration business recorded positive factors 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 property.
Included among the many finest performers had been Christopher Hohn’s TCI, Ken Griffin’s Citadel and Andreas Halvorsen’s Viking.
Prime 20 managers by 2023 earnings
| Agency | Property (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 had been buoyed by the inventory market’s “unbelievable run” in 2023. Nevertheless, he added that many additionally showcased particularly savvy inventory choice methods.
“You possibly can 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 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% achieve.
Included in its largest holders had been Alphabet, Canadian Nationwide Railway, Visa and Basic 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, nicely above the $655.5 billion in complete managed property.
A hedge fund is a restricted partnership of personal traders whose cash is managed by fund managers. Hedge funds are usually know for investing in increased threat and extra non-traditional property in comparison with mutual funds.
