According to data group HFR, there are more than 15,000 hedge funds managing about $3 trillion worth of assets worldwide. Most of them are located in and around New York City. Unlike banks and other financial institutions, hedge funds don’t attract much regulatory scrutiny even though they manage trillions of dollars worth of assets. Here we take a look at the top 10 biggest hedge funds in the world and how much money they manage.
Hedge funds are notoriously secretive. Unless you are rich, you can’t invest in them because their minimum investment is $500,000 or higher. Hedge funds charge ridiculously high fees – typically 2% of assets under management and 20% of gains.
For the uninitiated, hedge funds are investment funds that aim to generate positive returns for their investors in both bull and bear markets. They design their strategies to protect your portfolio from market uncertainties. They employ both long and short strategies, and invest across stocks, bonds, gold, derivatives, currencies, and commodities. In recent years, they have been using complex algorithms and analytical practices to generate alpha.
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These are the ten biggest hedge funds on the planet. The ranking is based on data from Pensions & Investments and ADV Ratings. Many of them also manage public funds and employ non-hedge fund strategies. For this ranking, we’ve considered only assets following hedge fund strategies.
Biggest hedge funds: List
10- Davidson Kempner Capital
Headquartered in New York City, Davidson Kempner Capital Management has about $30.8 billion in assets under management as of June 2019. This hedge fund employs five strategies – long/short equity, distressed investments, merger arbitrage, convertible bonds arbitrage, and long/short credit. Davidson Kempner also has additional offices in London, Hong Kong, Dublin, and Philadelphia.
Led by billionaire hedge fund manager Kenneth Griffin, Citadel has $32.24 billion in AUM. It has more than 1400 employees worldwide. The Chicago-based hedge fund focuses on equities, fixed income, commodities, credit, and quantitative strategies. It was named the Institutional Hedge Fund Manager of the Year at Institutional Investor Awards 2019.
Founded in 1988, BlackRock is the world’s largest asset management firm with $7.4 trillion of assets under management at the end of 2019. Experts have called it the world’s largest shadow bank because of its mammoth size. However, it has only $32.9 billion allocated to hedge fund strategies, according to Pensions & Investments. It has about 13,000 employees in more than 30 countries.
7- Elliott Management
Founded in 1977 by Paul Singer, Elliott Management is a privately-owned hedge fund. It has $37.7 billion in AUM as of June 2019. Elliott is one of the world’s largest activist funds. Many refer to it as a vulture capital fund because it invests mainly in distressed securities. Last year, it acquired Barnes & Noble retail bookstore chain for $683 million. In 2017, Elliott Management had raised a staggering $5 billion from investors in less than 24 hours.
6- Millennium Management
New York-based Millennium Management was founded in 1989 by Israel Englander. According to Pensions & Investments, it has $38.7 billion in AUM as of June 2019, which swelled to $40 billion by the end of December 2019. It deploys money in a variety of investment strategies including equities, currencies, futures, and asset-backed securities.
5- Two Sigma Investments
Two Sigma was founded in 2001 by a team of computer scientists and mathematicians. It uses cutting-edge technologies such as artificial intelligence, machine learning, and distributed computing for its trading strategies. Two Sigma has $42.9 billion in AUM as of June 2019. Headquartered in New York City, it has additional offices in London, Hong Kong, and Japan.
4- AQR Capital Management
Greenwich, Connecticut-based AQR Capital is the fourth biggest fund in the world with $60.8 billion in AUM. It employs about 1,000 people in Greenwich, Chicago, Boston, Los Angeles, London, Tokyo, Hong Kong, and Frankfurt. AQR Capital uses quantitative analysis and computer models to make investment decisions.
3- Man Group
Man Group is the only non-US hedge fund on this list. London-based Man Group traces its origins to 1783, when James Man established it as a sugar cooperage and brokerage. It’s now the world’s largest publicly-traded hedge fund with $62 billion in AUM as of June 2019. It is by far the largest hedge fund in Europe. Man Group also has offices in New York, Boston, Hong Kong, Tokyo, Sydney, and Switzerland.
2- Renaissance Technologies
Founded by noted mathematician Jim Simmons in 1982, Renaissance Technologies is a highly secretive hedge fund with an incredible track record. Its flagship Medallion fund has returned a staggering 66% annually before fees and 39% after fees between 1988 and 2018. Jim Simmons is an award-winning mathematician and a Cold War-era code breaker for the National Security Agency. Renaissance Technologies employs complex mathematical models to analyze and execute trades. It has $68 billion in AUM as of June 2019.
1- Bridgewater Associates
Founded in 1975, Westport, Connecticut-based Bridgewater Associates is the largest hedge fund in the world. According to Pensions & Investments, it has $132 billion in AUM as of June 2019. By the end of 2019, its assets under management jumped to $160 billion. Bridgewater Associates had a lackluster year in 2019, gaining just $600 million for its investors. Bridgewater Associates uses a global macro investing strategy based on economic trends. Since its inception, the hedge fund has gained $58.5 billion for its investors.