The Strategist

10 largest hedge funds in the world

06/28/2017 - 10:22

2016 was a difficult year for hedge funds. In general, they brought only 5.4% of the profits to customers, which is much lower than the S&P 500 shareholders’ profits ( 11.9%), says eVestment.

Banco Carregosa
Banco Carregosa
Low rates and high costs led to the outflow of money from hedge funds: about $ 70 billion was withdrawn in the last year alone. This is the maximum figure since 2009, according to HFR.

Nevertheless, not all hedge funds showed unsatisfactory results. Incomes of some of them grew 10 times or more.

Below are the top 10 largest hedge funds by assets.

10. Winton Capital Management - $ 32 billion

Winton Capital Management Ltd. was founded more than twenty years ago in the UK. Its founder, billionaire David Harding, donated millions to urge the British to stay in the EU. He lost, but his fund Winton Diversified (uses algorithmic programs) managed to earn on Brexit.

9. Och-Ziff Capital Management - $ 33.5 billion

Daniel Och founded the hedge fund and institutional alternative asset management company Och-Ziff Capital Management Group. Now, he is its chief executive officer, chairman of the board of directors and chairman of the partner managing committee. Och-Ziff invests assets around the world, uses certain strategies and targets them for work in a specific locality.

Portfolio for each of its funds is selected based on the current market conditions, the capital preservation rate and established breadth of investment diversity.

Och-Ziff became one of the few publicly traded hedge funds in America, having conducted an initial public offering in November 2007 under the ticker OZM on the New York Stock Exchange at a price of $ 32 per share.

8. Man Group - $ 33.9 billion

Man Group coped with instability in the markets better than many in the industry in 2016. The largest hedge fund that traded on the exchange managed to save most of its assets: according to official data, total assets under management decreased by only $ 100 million. Strategic planning and diversification were bearing fruit, but market instability, as well as unpredictable risks, remain the decisive factor,.

7. Millennium Management - $ 33.9 billion

Millennium Management was founded in 1989. The fund’s number of employees exceeds 2200 people, and the company's offices are located in Europe, the US and Asia.

6. DE Shaw & Co - $ 34.7 billion

Fortune magazine called David Shaw’s DE Shaw & Co "the most intriguing and mysterious force on Wall Street." This hedge fund is different from others, since its activities are based on a combination of computer technology and finance.

5. Two Sigma - $ 38.9 billion

The Two Sigma Hedge Fund, founded by David Siegel and mathematician John Overdeck in 2001, ranks 22nd among US hedge funds.

In 2014, Two Sigma raised a macroeconomic fund with $ 3.3 billion under management - one of the largest in the sector since the crisis. All Two Sigma funds work with big data. The fund’s favorute strategy based on algorithms for traders.

4. Renaissance Technologies - $ 42 billion

Renaissance Technologies investment company, which trades on stock exchanges around the world, has been at the forefront of mathematical and economic analysis for almost two decades.

It uses computer models to predict changes in prices for liquid financial instruments. These models use as much data as they can gather, then look for nonrandom components, on the basis of which predictions can be made.

3. JPMorgan Asset Management - $ 45 billion

JPMorgan Asset Management serves financial institutions and private investors around the world.

More than 650 investment specialists work in every major global market. They use more than 200 different strategies covering all categories of assets, including stocks, bonds, liquid funds, currency, real estate, hedge funds and private equity funds.

2. AQR Capital Management - $ 69.6 billion

AQR Capital Management Hedge Fund, with assets of $ 69.6 billion, took the second place in the ranking of the largest hedge funds in 2016, behind only Bridgewater Associates, led by Ray Dalio.

1. Bridgewater Associates - $ 122.2 billion

Bridgewater Associates is the largest hedge fund in the world with assets of $ 122.2 billion. The fund is founded by Ray Dalio. The fund has earned a record amount of money for the entire history - $ 50 billion over 20 years.

The basic fund has a zero correlation of revenues with the market and a very low correlation to other hedge funds.