Signage for Citadel Funding Group LLC hangs exterior their workplace in Chicago, Illinois, U.S.
Bloomberg | Getty Photos
The world’s high hedge funds raked in report earnings final yr amid a resurgence in inventory markets, new evaluation confirmed.
The 20 main funds 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 Investments, a fund of hedge funds. That is additionally round triple the $22.4 billion fund managers earned for buyers in 2022.
General, the fund administration business recorded positive aspects of $218 billion after charges, in keeping with LCH Investments estimates.
The highest funds — recognized as these which have carried out greatest 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 greatest performers have been Christopher Hohn’s TCI, Ken Griffin’s Citadel and Andreas Halvorsen’s Viking.
High 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 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
Brad Amiee, director and head of analysis at LCH Investments, mentioned the main funds have been buoyed by the inventory market’s “incredible run” in 2023. Nonetheless, he added that many additionally showcased particularly savvy inventory choice methods.
“You possibly can argue that, since shorting is such a difficult sub-strategy, conserving issues long-biased and having a concentrated portfolio of top of the range positions has been the best way to go,” Amiee instructed 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 holdings have 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 aspects 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, properly above the $655.5 billion in complete managed belongings.
A hedge fund is a restricted partnership of personal buyers whose cash is managed by fund managers. Hedge funds are sometimes identified for investing in higher-risk and extra nontraditional belongings in contrast with mutual funds.