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World’s largest hedge funds report bumper yr of income

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Signage for Citadel Funding Group LLC hangs outdoors their workplace in Chicago, Illinois, U.S.

Bloomberg | Getty Photographs

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The world’s high hedge funds raked in report income final yr amid a resurgence in inventory markets, new evaluation confirmed.

The 20 main fund managers made $67 billion in investor income 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.

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Total, the fund administration business recorded positive factors 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 income final yr, regardless of managing lower than a fifth (19%) of the business’s belongings.

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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 income

Agency Belongings (billion) Internet income since inception (billion) 2023 income (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

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LCH Investments’ director and head of analysis, Brad Amiee, stated that 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 could possibly argue that, since shorting is such a difficult sub-strategy, preserving issues long-biased and having a concentrated place in top quality positions has been the way in which to go,” Amiee told the Financial Times.

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TCI, the highest rating fund, recorded investor income of $12.9 billion and ended final yr up 33%, beating the S&P 500’s 24% achieve.

Included in its largest holders have been Alphabet, Canadian Nationwide Railway, Visa and Basic Electrical.

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Citadel, which ranked second in 2023, made $8.1 billion in income after bringing in a record-breaking $16 billion in 2022. Its $74 billion in positive factors since inception rank it as probably 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 income since inception, effectively above the $655.5 billion in whole managed belongings.

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A hedge fund is a restricted partnership of personal buyers whose cash is managed by fund managers. Hedge funds are sometimes know for investing in greater threat and extra non-traditional belongings in comparison with mutual funds.

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