We finally have the year-end returns from HSBC Holdings plc (LON:HSBA) (NYSE:HBC)’s Hedge Weekly, so here is the list of best and worst performing hedge funds of 2012. In 2011, the highest gaining hedge funds were mostly located in UK/ Europe, but this year is different as we see big names like Dan Loeb, David Tepper, Leon Cooperman and Steve Kuhn in the top order. The S&P 500 (INDEXSP:.INX) rose 13 percent last year and all of the top 30 funds beat the index by a fairly large margin.

Hedge Funds

The ranking excludes funds with less than $150 million under management.

Top Ten Hedge Funds

1. BTG Pactual Distressed Fund: 45.94%

The superb performance follows a loss of -4.5 percent in 2011. Mortgage and structured credit has been one of the best performing strategies of 2012, according to UBS AG (NYSE:UBS) hedge fund research. Credit Strategy rose 10.4 percent on average, the highest gain.

Asset class/Strategy: Distressed Mortgage

Fund AUM: $245 million

Firm and Manager: BTG Pactual Global Asset Management

2. Tilden Park Offshore Investment Fund: 40.76%

Again a Credit focused fund, beating the high end of returns.

Asset class/Strategy: Credit Long/Short

Manager: Josh Birnbaum

Fund AUM: $955 million

Firm: Tilden Park

3. CQS Directional Opportunities: 35.86%

Strategy: Multistrategy

Manager: Michael Hintze

Fund AUM: $1.49 billion

Firm: CQS

4A. Pine River Fixed Income 34.99%

Fixed Income Arbitrage was not an easily managable strategy across the hedge fund world last year, which makes Pine River’s returns all the more impressive.

Asset class/Strategy: Fixed Income Arbitrage

Manager: Steve Kuhn

Fund AUM: 3.56 billion

Firm: Pine River Capital Management

4B. Senvest Partners: 34.65%

Senvest, a relatively unheard of name, landed in the worst list of 2011 with -33.96 percent and ranked among the best of 2010 with +39.59 percent. This hedge fund does have the habit of wiping it all out and then regaining big.

Asset class/Strategy: Equity Long/Short

Manager: Richard Mashaal

Fund AUM: 179 million

4C.  Third Point Ultra: 34.47%

Asset class/Strategy: Multi Strategy

Manager: Dan Loeb

Fund AUM: $1.39 billion

Firm: Third Point LLC

4D. BlackRock, Inc. (NYSE:BLK) Obsidian: 34.01%

Asset class/Strategy: Fixed Income Arbitrage

Manager: Stuart Spodek

Fund AUM: $710 million

Firm: BlackRock Inc

5. Chenavari Toro Capital 32.42%

Again a credit focused fund lands in the top performers list. This one is particularly noteworthy as Chenavari has ranked in the top ten list of 2011 and 2010 as well. Chenavari Corporate Credit Strategy also gained a handsome 17 percent in last year.

Strategy: Distressed European ABS

Fund AUM: $362 million

Manager: Loic Fery

Firm: Chenavari Investment Managers

6A. Marlin Fund: 31.52%

Strategy: Equity Long/Short

Fund AUM: $215 million

Manager:  Michael Masters

Firm: Masters Capital Management

6B. Odey European: 30.69%

Asset class/Strategy: Long/Short Equity

Manager: Crispin Odey

AUM: $1.44 billion

Firm: Odey Asset Management

7. Palomino Fund: 29.29%

David Tepper’s Palomino Fund recovers after posting a loss of -3.53 percent in 2011. The fund has managed an annualized return of 26.12 percent.

Asset class/Strategy: Credit Long/Short

Manager: David Tepper

Fund AUM: $5.38 billion

Firm: Appaloosa Management

8A. Pine River Liquid Mortgage: 28.98%

Another one of Steve Kuhn’s funds returns big in 2012. 

Asset class/Strategy: Fixed Income Arbitrage

Managers: Jiayi Chen and Steve Kuhn

Fund AUM: $1.08 billion

Firm: Pine River Capital Management

8B. Marcato International Ltd: 28.67%

Asset class/Strategy: Event Driven

Manager: Richard McGuire

Fund AUM: $500 million

Firm: Marcato Capital Management

8C. Perceptive Life Sciences Offshore Fund: 28.09%

Asset class/Strategy: Equity Long/Short

Manager: Joseph Edelman

Fund AUM: $535 million

Firm: Perceptive Advisors LLC

9A. BTG Pactual Global EM and Macro Fund (GEMM): 27.69%

BTG Pactual’s second fund to land in the best performers list. AUM rose more than $300 million in last quarter of 2012. GEMM won the Best Global Macro Fund award by EuroHedge in 2010 when it posted a return of 22.38%. 

Asset class/ Strategy: Macro

Fund AUM: $4.06 billion

Firm: BTG Pactual Global Asset Management

9B. WF Asia Fund: 27.66%

Strategy: Equity Long/Short

Manager: Scobie Ward

Fund AUM: $222 million

Firm: Ward Ferry Management Ltd

10. Omega Overseas Partners :25.52%

Asset class/Strategy: Equity Long/Short

Manager: Leon Cooperman

Fund AUM: $1.56 biillion

Firm: Omega Advisors

Other famous funds which did not make into the list but returned profitably are, Jon Bauer‘s Contrarion Capital Offshore (AUM: $2.16 billion) up 24.31%, Tim Wong‘s Man AHL Evolution (AUM:$2.1 billion) up 23.6 percent, Jonathan Kolatch’s Redwood Offshore (AUM: $2.79 billion) up 21.9%, M.R. Julis & J.S. Friedman’s Canyon Balanced Fund (AUM $1.8 billion) up 20.51%, John Paulson‘s Paulson Enhanced (AUM: $2.02 billion) up 19.6 percent, Lee Ainslie’s Maverick Capital Fund (AUM: $2.6 billion) up 15 percent and Richard Perry‘s Perry Partners Intl (AUM: $4.89 billion) up 15.33 percent. UK based Lansdowne Partners and Marshall Wace also returned well across their several funds.

For information about the worst performing hedge funds of last year, take a look at our previous lists:

Loeb Lands In Best Five Hedge Funds, Paulson Nabs Two Spots In Worst

The Best And Worst Performing Hedge Funds of 2012