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 document 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 in the course of the pandemic-era rally of 2021, in accordance analysis Monday from LCH Investments, a fund of hedge funds.
General, the fund administration business recorded good points of $218 billion after charges, in line 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.
Prime 20 managers by 2023 earnings
| Agency | Property (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 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 “implausible run” in 2023. Nevertheless, he added that many additionally showcased particularly savvy inventory choice methods.
“You might argue that, since shorting is such a difficult sub-strategy, conserving issues long-biased and having a concentrated portfolio of top quality positions has been the way in which to go,” Amiee told the Financial Times.
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 good points 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 belongings.
A hedge fund is a restricted partnership of personal traders whose cash is managed by fund managers. Hedge funds are sometimes identified for investing in larger danger and extra non-traditional belongings in comparison with mutual funds.
