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Here’s a look at the ten biggest hedge funds in the world. A hedge fund gathers capital from individual and corporate investors and invests it in a range of assets. The best hedge fund managers use complex algorithms and well tested risk management techniques to secure a strong rate of return for their clients. There are currently over 9,000 hedge funds in operation around the world with a total of three point six trillion dollars in assets under management.
Poor performance and high fees are driving clients away from many hedge fund managers in recent years, but there are a group of companies that have managed to stay largely above the fold. When it comes to ranking size of hedge fund, it’s all about the assets under management, otherwise known as the AUM. Every company on this list manages billions and billions in assets, and many of them report returns that are far above those of their competitors.If you are looking to invest with a hedge fund you may have to look elsewhere though, many of the funds on our list are no longer accepting new clients.The best hedge fund managers have the ability to significantly elevate a person’s wealth while also profiting handsomely at the same time.
The 10 Biggest Hedge Funds in the World
Number 10: Winton Group
Assets under management, twenty-eight point five billion dollars.. The company has expanded globally with offices in Sydney, Hong Kong, San Francisco, New York, Tokyo, and Zurich. Their reported average rate of return is about 19% over the past 10 years. Its founder David Harding is the 34th richest person in the UK, and he is regularly one of the highest-earning hedge fund managers in the world.
Number 9: Oz Management
Assets under management, 31 point eight billion dollars. Och-Ziff Capital Management, otherwise known as Oz Management, has been in operation since 1994. They have offices in New York City, Hong Kong, London, Mumbai, Beijing, and Houston. Their clients reportedly saw returns of nearly 10% last year, and their most recent reports put Oz Management’s AUM at thirty one point eight billion dollars.
Number 8: Elliott Management
Assets under management, thirty four billion dollars. Billionaire Paul Singer founded Elliott Management Corporation in 1977 in New York City.
They aren’t accepting any new clients. Elliott’s largest holding is the oil company Hess, they own seventeen point eight million shares worth over 1 billion dollars. Their total AUM is thirty four billion dollars.
Number 7: Millennium Management
Assets under management, thirty six billion dollars. In 1989 Israel Englander founded Millennium Management with a thirty five million dollar investment. The hedge fund almost went under when an early business partner jumped ship, but the firm has been excelling in recent years and now has thirty six billion dollars in assets under management.Today Millennium takes over two million trades per day and has expanded to twelve offices worldwide.
Israel Englander’s Net Worth and Apartment
He paid $71.3 million dollars for a duplex apartment on Park Avenue in New York City back in 2014, which was the most that anyone had ever paid for a New York City co-op.
Number 6: Two Sigma
Assets under management, forty five billion dollars. The firm takes a unique approach to investments, employing advanced technology like artificial intelligence to maximize returns. The fund has grown quickly in the last few years, in 2010 they were managing just 5 billion dollars in assets, and as of the end of 2017 that number had reportedly increased 900 percent to 45 billion dollars. Over the past 10 years their returns have averaged around 30 percent. The company is based in New York City, but also has offices in Houston, Hong Kong, and London.
Former Employee Convicted of Theft
In 2014 a former employee named Gao was convicted of stealing proprietary information from the company. He had to spend eight months in jail for this crime. Although Gao did not escape punishment, there are plenty of other rich criminals who have.
Number 5: De Shaw & Co
Assets under management, 47 billion dollars. D. E. Shaw & Co is also based in New York City, but has a number of offices in London, Bermuda, Shanghai, Hong Kong, and some other cities.The firm was started in 1988 by David E. Shaw, though he stepped away from daily operations back in 2002. D. E. Shaw now has the distinction of giving the third highest returns of any hedge fund in the world since the company was started. Currently the firm manages 47 billion dollars in assets.
Daniel Michael Au Lawsuit
He’s now bringing a defamation lawsuit against the company and refused to take a ten million dollar settlement offer. He has also threatened to reveal details about D. E. Shaw’s company culture. Meanwhile David Shaw and his company both claim that his accusations lack merit.
Number 4: Man Group
Assets under management, fifty three billion dollars. The Man Group is a London-based hedge firm that was established in 1783 by James Man, a brokerage that dealt in sugar and rum. Today it’s the largest publicly traded hedge fund company, assets under management reportedly increased 28 percent in the 2017 fiscal year, and today the AUM stands at one hundred and twelve point seven billion dollars, with about fifty three billion dollars in hedge fund assets.
Man Group’s Expansion Into China
In 2017 the company announced they would be establishing a hedge fund in China. They are one of the first international firms that China has allowed into the country to operate a private securities investment firm. The Man Group has been trading in the industry for 235 years, and they continue to be one of the top players in the hedge fund game.
Number 3: AQR Capital Management
Assets under management, seventy seven billion dollars. AQR Capital Management was started in New York City back in 1998, it has since moved to Greenwich Connecticut and has offices in Hong Kong, London, Sydney, Los Angeles, Boston, and Chicago. AQR stands for Applied Quantitative Research.
AQR’s Losses During the Financial Crisis
AQR suffered major losses in the global financial crisis, going from 39 billion dollars in assets under management in 2007 to 17 billion by the end of 2008. Today AQR manages over 225 billion dollars in total assets, with about 77 billion of those in hedge funds. About 50% of their employees reportedly hold PhDs, and the company is built on a very academic foundation. The fund was established by four men, including Cliff Asness, who has a net worth of three point six billion dollars.
Number 2: Renaissance Technologies
Assets under management, 84 billion dollars. James Simons is an award-winning American mathematician and a Cold War code breaker. He founded Renaissance Technologies in 1982 in New York City.
Robert Mercer Controversy
The former CEO Robert Mercer made headlines in 2017 because of his strong financial and vocal support for president Donald Trump, and a controversy with an ex-employee who claimed he was fired for criticizing Mercer’s political views. Mercer went on to resign in 2017. The fund itself donated over 33 million dollars to federal campaigns in the 2016 election, making it the top financial firm contributor.
Renaissance Technologies’ Recent Returns
The company posted returns of approximately 14% in 2017. From 1994 to 2014 they averaged nearly 72 percent in annual returns. Renaissance has been thriving in the past couple of years, jumping from managing 27 billion dollars in assets at the start of 2016, to forty five billion dollars in 2017, to now managing eighty four billion dollars in assets.
Number 1: Bridgewater Associates
Assets under management, one hundred and twenty three billion dollars. Here we are at the very top of our list, the biggest hedge fund in the world is Bridgewater Associates, based in Westport Connecticut. From 2002 until it stopped accepting new clients in 2005, it was the fastest growing asset manager in the world. Ray Dalio has built a personal fortune of seventeen point four billion dollars based on its success, making him the 54th richest person in the world.
Bridgewater’s Net Gains
In recent years Bridgewater has been posting mixed results, but they remain a dominant force in asset management. Bridgewater is considered the most successful hedge fund in history in terms of net gains, having produced net gains of forty five billion dollars since their founding. In 2016 alone Bridgewater brought in four point nine billion dollars in gains, and they currently manage one hundred and twenty three billion dollars in assets.
Closing Thoughts
These companies have many things in common, but they found a way to make themselves stand out among all of their competitors. Whether they’ve been around for 300 years or less than 20, these companies have found a way to analyze data and master their algorithms to offer their clients some of the best returns in the industry, further securing their place in the investment arena.
Bonus: The Bernie Madoff Fraud
The US Securities and Exchange Commission ignored complaints about Bernie Madoff’s fraud for eight years. In 1999 a financial analyst named Harry Markopolos came to the conclusion that Bernie Madoff’s hedge fund was a scam, after doing four minutes of math he found that Madoff’s numbers just didn’t add up. He dug further into the financials of Madoff’s business and realized he was likely committing fraud on a massive scale.
He started presenting evidence to the US Securities and Exchange Commission in 2000, and kept coming back to them with further evidence over the next eight years. Harry went on to write a book about his experience titled No One Would Listen.