Close to 50% of the largest hedge funds across the world are set to increase their allocation.
The tide is turning for good across the hedge fund industry.
After a few turbulent years, the outlook for the hedge fund industry is pointing northwards.
Data from some of the world’s largest hedge funds indicate that assets worth close to $300 billion will be allocated the end of 2017.
Not just that, as per the estimates from the top players, inflows could rise above $10 billion in the same period.
However, a quick survey of some of the largest hedge funds in the world indicates some anomaly in terms of regional allocation.
Even from the list of some of the largest European hedge funds, there are only very few in the list of the top performers in the global list.
But that is only one region.
We conducted a quick study of some of the top players. Based on a variety of factors like:
- Redemption rate
- Extent of new allocation
- New fund creation
Here is a list of some of the largest hedge funds across the world.
They don’t just represent the extent of value creation.
But in many ways, they showcase the top trends in the hedge fund world.
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Largest Hedge Funds
Here is the list of the largest hedge funds and their history and description:
- Bridgewater Associates
- Man Group
- Balyasny Asset Management
- Renaissance Technologies
- Field Street Capital Management
- Adage Capital
- JP Morgan
- Cerberus Capital Management
- All Weather Portfolio Trading
- Millennium Partners LP
- Pine River
- Och-Ziff Capital Management
- Two Sigma Investment
- AQR Capital Management
- Viking Global
- Elliot International
- Element Capital
- Citadel Global
- Winton Capital Management
- Brevan Howard
- Angelo Gordon
- Lone Pine Capital
- Discovery Capital Management
- Farallon Capital
- Garda Capital
1. Bridgewater Associates
According to details provided on the company’s website, the total asset under management is $87 billion in the hedge fund segment alone.
A global investment firm, its headquarters are in Westport, Connecticut.
They currently employ 1400 plus staff to service their clients located globally.
Overall this investment firm manages assets north of $150 billion across global investment initiatives.
They cover a wide gamut of investment strategies.
Their clients range from pension funds to central banks, corporate funds and the like.
2. Man Group
Founded in 1783, this London-based hedge fund is also amongst the world’s oldest and largest publicly traded institutions.
With its assets under management breaching the $80 billion mark, it is also a notable sponsor of many charitable and cultural events as well.
It is also listed on the London Stock Exchange.
To further enhance its efficiency and add to the customer convenience, it has introduced multiple sub-divisions of money managers.
So you have a separate division dealing with managed future while a separate arm is doing traditional and hybrid investment management.
The hedge funds division is completely separate, and the quantitative asset management is also offered on a standalone basis.
The independent arms are set to enhance efficiency and also bring in a relatively faster rate of service delivery.
The idea is to help customers get the most profitable deal with the minimum cost involved over the longer term.
3. Balyasny Asset Management
The total asset under management is close to $75.1 billion as per recently available data.
In all this, hedge fund has 24 accounts managed by 521 employees.
With assets well over the $1 billion mark, they fall in the list of the largest hedge funds across the world.
Almost 100% of the asset under management is in pooled investment vehicles.
And it employs a mix of technical, fundamental and cyclical analysis to formulate the portfolios.
The rate of return is relatively muted though at par with industry average.
4. Renaissance Technologies
This is because their investment model is based on a unique approach.
It is based on a concept where market signals are identified through the noise that is created.
In fact, their program powered by innumerable lines of computer code went on to generate as much as $55 billion revenue.
One of their biggest contributions is undeniably the acceptance of quantitative analysis as an accepted means of furthering hedge fund earnings.
In fact, Renaissance made this such a popular channel that even stock picking changed tracks and started adopting this model for a sustainable gain strategy.
However, Renaissance’s cash dealings are rather opaque and are not that simple to understand the exact profit percentages and how they are divided amongst the members.
But broadly the founders’ profit share accounts for almost 50% of the average gains that Renaissance registers.
Therefore, wealth valuation of this immensely successful hedge fund is rather complicated.
But suffice it to say that the average hedge fund investor can gain from this arrangement over the longer term in a sustained manner.
5. Field Street Capital Management
This New York-based investment advisory firm specializes in customized advisory services.
Founded in 2007, it actively follows macro trends.
A major part of the gain that it has seen in recent times has been an outcome of this macro focus.
There are 60 employees who are working non-stop to provide value added service to the 10 clients that they cater to.
The quality of service is absolutely customized and deals on a one on one basis.
6. Adage Capital
It provides investment advisory service to about 10 clients and employs just 50 people.
Based in the United States, it is a limited partnership hedge fund.
It was founded in 2001 and specializes in fundamental analysis of various asset classes to identify their fair value.
The investment decisions, of this Boston-based hedge fund, are based on the fundamental parameters of value.
This is how they compare a specific counter faring against the other and the associated implications that follow.
7. JP Morgan
Hedge Fund management is a part of the overall JPMorgan Asset Management firm.
Though it’s overall assets under management are north of $2 trillion, the AUM for the hedge fund segment is around $60 billion.
They operate on a global basis and adopt a mix of strategies across asset classes to maintain their profitability.
This hedge fund has a presence in pretty much every continent and is known for the consistency that they personify.
DE Shaw & Company:
One of the largest hedge funds globally, it was founded in 1988.
This New York-based firm was established by David Shaw.
Some of the key sectors that it invests heavily include technology, real estate, financial services and wind power.
All in all the hedge fund manages about $40 billion in investments across the world.
Though based in the United States, it now has offices in Europe and Asia as well.
The firm has also spread its wings adequately across North America as well.
8. Cerberus Capital Management
Some of the key investors include Government and private pension funds, insurance companies and several sovereign wealth funds as well.
Its areas of focus include technology, finance, telecommunication, healthcare, real estate, travel, leisure, retail and consumer products to name a few.
The company employs close to 100 employees for its advisory business.
They help churn out profitable strategies that can assure definitive gains in the future and help you get better value for your money.
9. All Weather Portfolio Trading
This hedge fund manages a net AUM of $38.66 billion and is based in the United States.
As the name hedge fund suggests, it is aimed at creating value pockets for investors even in a depreciating market scenario.
The idea driving one of the largest hedge funds is absolutely based on maintaining profitability irrespective of market conditions.
The rate of return too is in sync with the overall market rates.
After a few tepid set of years, experts believe the next few months and the year will bring in good tidings for the hedge fund.
10. Millennium Partners LP
A global investment firm, its asset under management is well over $35 billion.
The hedge fund currently employs over 2000 people and uses a range of strategies to churn out the profit.
It depends quite heavily on quantitative analysis as well.
They have been in business for more than 25 years now.
They allocate funds across a diverse range of strategies in predominantly liquid asset classes.
High-quality return is their primary focus.
11. Pine River
Based in the United States, the investment strategy of this hedge fund is based on the belief that we can always do better.
This global alternative asset management firm was founded on the principles of intellectual honesty.
They are committed to creating value across a range of global markets.
This alternative investment destination was founded by Brian Taylor in 2002.
Based in Minnesota, it now has a global presence.
Operational infrastructure and top investment talent continue to be the biggest positives about investing your money with this alternative asset management destination.
The excellence of service and performance has been internationally recognized through the plethora of awards and recognition that Pine River has won.
This has been evenly distributed through the years in a variety of disciplines.
If hedge funds are all about creating value even in falling markets, then BlackRock is undeniably the best example of this phenomenon.
When financial markets across the world bled, this is one of those investment platforms that generated positive and double-digit returns.
It was in many ways, one of the best manifestations of turning adversity into an opportunity.
It manages a total of $4 trillion plus AUM.
Of this, the AUM $31 million is allocated to the hedge fund segment.
It has a diversified portfolio of a variety of counters that help in maintaining profitability.
13. Och-Ziff Capital Management
The hedge fund saw a dramatic 80% value erosion on the back of a bribery scandal.
But experts say that at the current moment the upside is significantly higher compared to the downside potential in its value.
In fact, the fund’s strong track record of outperformance.
Experts peg this fund to rise 180% by 2020.
It currently manages about $33 billion across a host of clients.
They are one of the world’s largest hedge funds dealing with a wide range of assets.
14. Two Sigma Investment
It was founded in 2001 by John Overdeck along with Mark Picard and David Seigel.
The company uses a series of state of the art mechanism to bring better value to your investment.
It’s trading strategies are computed with the help of machine learning, distributed computing and artificial intelligence.
It is needless to mention that this no doubt makes the strategies a lot more pointed and makes sure that the gains too are significantly higher than what you would anticipate.
The total amount asset that it is managing at the moment is close to $35 billion.
No doubt it is ranked amongst the top most hedge funds globally.
The consistency in returns and the relatively higher rate of returns also add to the charm of the hedge fund amongst its peers and closest competitors.
It is decidedly one of the best offerings to choose for sustained long-term gains.
15. AQR Capital Management
Over the counter derivatives also feature prominently in the list of products that they deal with.
Founded in 1998, this one has about $30 billion AUM in the hedge fund segment.
The straightforward investment techniques coupled with focused buys makes sure that profitability is not compromised in any possible manner.
In 2009, it was amongst the first ones to offer these alternative investment strategies in a mutual fund format.
The advantage was customers associated with the mutual fund format quite effortlessly, and they were able to use it to derive maximum value too.
Overall, it has close to $175.2 billion in assets under management supported by close to 700 employees.
Given AQR’s commitment to quality and innovation, it has been able to attract a fairly large number of investor base.
Together they are able to offer assured gains without compromising the quality of gains in any way.
As a result, AQR Capital has also managed to maintain a steady rate of returns too.
16. Viking Global
The firm manages close to $30 billion worth assets across a rather expansive range of asset classes.
It was established by its CEO and risk manager Ole Andreas Halvorsen and is registered as an advisory firm with the US Securities and Exchange Commission.
Viking has maintained a diverse focus to keep the gains consistent.
The firm has also been instrumental in actively taking forward its advisory services to seal additional gain for its investors and founders alike.
It is needless to mention that the fund has put up a better than average performance Vs peers.
17. Elliott International
When you compare this with the 10.9% S&P gains in the same period, the contrast is evident quite distinctly.
The reason why this one is considered one of the largest hedge funds is that the asset under management is rising steadily.
Its current AUM is close to $23 billion. This hedge fund now focuses on multi-strategy investment to generate the most lasting returns.
18. Element Capital
One of the largest hedge funds in the world, this has been in the news for its amazing capital raising abilities within a short period.
It raised close to $2 billion in a matter of two weeks.
Not just that, the return outlook is rather encouraging.
It generated 8% plus return in the same period that its competitors returned a mere 1.6%.
In the recent past, it clocked a cool7% plus gain as well, and experts peg scope for additional gains going forward.
This hedge fund ranked 17 in the list of the Penta’s Top 100 Hedge Funds for 2016.
19. Citadel Global
This US-based hedge fund has the rare distinction of being amongst the 3% of hedge funds in business for over 20 years.
It manages assets and wealth of some of the world’s best institutional investors.
As you would see in the case of most successful hedge funds, it uses diverse strategy to maintain profitability in a sustainable manner.
BTG Pactual Global Emerging Markets:
Yet another US-based hedge fund, this one too easily counts amongst the world’s largest hedge fund.
The hedge fund manages asset worth $30.21 billion and invests in equity and fixed markets.
It was launched and managed by the Asset Management Arm of the BTG Pactual.
Global equities, US mortgages, and asset-backed securities coupled with global credit and Latin American assets are some of the top investment opportunities that this hedge fund capitalizes upon.
Middle East, Africa and Latin America remain the hub of its focus.
20. Winton Capital Management
It was founded in 1997 by David Harding and manages close to $32.1 billion.
Like most hedge funds it services a series of investment in a way that protects the downside of the investment as best as possible.
Several pension funds, sovereign wealth funds, and banks invest with Winton Capital to realize maximum value for their investment.
The diversified investment strategy makes sure that Winton Capital always stays ahead if competitors in terms of performance and profit.
Moreover, there is an additional focus on quality investment further enhances profitability.
21. Brevan Howard
At one point of time though, around October 2013, it was the world’s biggest macro hedge funds with AUM around $40 billion.
Even during the 2008 financial crisis, this fund delivered return well north of 20%.
It’s only in 2014 that it finally reported the loss after a consistently positive stint for 12 years.
The firm’s overall strategy continues to be focusing on near-term opportunities based on economic trends.
They believe in maintaining fairly long-term investment and call themselves ‘global alternative asset manager’.
22. Angelo Gordon
It was founded in 1988 and manages close to $27 billion.
The company seeks to generate absolute returns with a relatively low level of volatility.
The firm is constantly on the lookout for innovative investment options that help the stay on top of the overall competition curve.
They have mastered a series of absolute return strategies that are applicable to both institutional investors as well as high net worth individuals.
They believe that their long-term insight and experience helps them get an edge over peers.
23. Lone Pine Capital
One of the top most and among the largest hedge funds globally, it offers a rather unique offering.
This not just attracts a larger number of investors but also makes sure that the investors are suitably rewarded with consistent returns.
Lone Pine Capital’s innovation is borne well in its unique investment style. It combines fundamental analysis with deep bottom up approach.
Though this is not heard about that often, the benefit of it is well borne out by the popularity that this hedge fund commands.
Lone Pine uses this unique investment style to invest in a variety of global equity and manages close to $29 billion at the moment.
24. Discovery Capital Management
They manage around $33 billion.
They are famous for their discretionary investment strategies they follow to generate absolute returns.
The investment strategies are both unique and based on value.
They are for creating the sustainable value that they represent.
They have a position in a wide range of sectors including consumer durables, utilities, real estate, healthcare and the like.
Focused strategic return is their biggest virtue.
25. Farallon Capital
Some of the most important dealings include University endowments, foundations and also wealth management of high net worth individuals.
The assets under management are close to $21 billion, and they have close to 165 professionals across 8 countries servicing clients across the world.
They founded the company in 1986.
Since that time, they have maintained a steady rate of growth across a wide cross section of product offering.
In the past few decades, they have maintained their rate of return at a uniform rate.
It has a track record of churning out consistent and uncorrelated returns.
Based in Minneapolis, Minnesota, it also has a significant presence in Switzerland.
Black River chief Jeff Drobny runs this hedge fund.
There is no link between Garda Capital Cargill anymore.
However, Cargill remains a key investor in this US-based hedge fund.
The Garda Capital group still takes the Proprietary trading strategies of Cargill.
Sophisticated institutional investors are handling the investment strategy for Garda.
They make sure that the return rate continues to maintain past consistency.
When you are identifying some of the world’s largest hedge funds, you can group them under various sub-sects.
However, the assets that they manage is by far the most popular method to classify the different hedge funds that are operational worldwide.
2017 seems to be particularly positive in terms of the outlook for the hedge fund industry.
Therefore, it makes sense to list out the largest hedge funds that you can associate with for better profit and better value for your investment.
However, the regional allocation of the successful and the largest hedge funds worldwide throws us some interesting facts.
When you are looking out for the largest hedge fund in the world, a majority of them are from US.
Even the largest European hedge funds are far lower than some of the top players from US.
But globalization has made sure that customer allocation is pretty well-spread.
The largest hedge funds in the world today caters to a wide range of customers.
They serve the institutional investors as well as the several deep-pocketed high rollers.