Top 10 most successful hedge fund managers of all time

Top 10 most successful hedge fund managers of all timeQuinceMedia / Pixabay

Many of the world’s best-performing hedge fund managers earn over a billion dollars a year. According to Bloomberg Billionaires Index, at least five hedge fund managers raked in $1 billion in 2019. That’s quite surprising because most managers struggled to outperform the S&P 500 index’s 31.5% gain in 2019. Their personal income is not the best way to determine who the most successful hedge fund managers are.

And neither is their annual performance relative to the S&P 500. That’s because, as hedge funds argue, they seek to deliver positive returns in both bull and bear markets. So, you get to know their real worth in times of adversity. They employ both long and short strategies, and invest across stocks, bonds, derivatives, currencies, and commodities to generate positive returns even when the S&P 500 tanks.

Every year, LCH Investments ranks the most successful hedge fund managers based on how much money (in dollar terms) they have gained for investors after fees since inception. London-based LCH Investments is a fund of funds and a subsidiary of Edmond de Rothschild Capital Holdings. Over time, the top 20 hedge fund managers have made a staggering $558 billion for their investors.

Jim Simmons’ Renaissance Technologies is one of the world’s largest hedge funds. The flagship Medallion fund has returned a staggering 66% annually before fees and 39% after fees between 1988 and 2018. But Simmons is not ranked among the top ten most successful hedge fund managers because the Medallion fund was not available to outside investors.

Renaissance Technologies launched the Renaissance Institutional Equities Fund (RIEF) and Renaissance Institutional Diversified Alpha (RIDA) in 2005 for outside investors. Since 2005, the hedge fund has gained $22.3 billion, including $5.6 billion in 2019, for outside investors. It ranks 15th in LCH Investments’ list.

These are the ten most successful hedge fund managers of all time:

10- David Tepper, Appaloosa Management, $26.7 billion

Since founding Appaloosa Management in 1993, David Tepper has gained $26.7 billion for investors. He invests primarily in distressed debts. Tepper shot to fame during the 2008-09 financial crisis. He made a number of bold calls including investing in depressed bank securities. Tepper’s Appaloosa has gained 25% a year since inception. However, he announced last year that he would convert Appaloosa into a family office and return the outside money to investors.

9- Daniel Och, Och-Ziff/Sculptor Capital, $27.5 billion

Och-Ziff Capital Management has been renamed Sculptor Capital Management. Daniel Och founded the hedge fund in 1994. He has since generated $27.5 billion for investors. In 2016, Och-Ziff Capital was fined $413 million and Daniel Och was fined $2.2 million for paying more than $100 million in bribes to African government officials. He was replaced as the CEO of the firm in 2018, though he continued to serve as its chairman through March 2019.

8- Paul Singer, Elliott Associates, $28.3 billion

Paul Singer continues to lead one of the world’s oldest and most successful hedge funds. He founded Elliott in 1977. Over a period of more than four decades, Singer has gained $28.3 billion for investors after fees. He is one of the most feared hedge fund managers because of his aggressive investments in distressed securities and activism.

7- Ole Andreas Halvorsen, Viking Global Investors, $29.7 billion

Norwegian-born Andreas Halvorsen is one of the so-called Tiger Cubs – the former employees of Julian Robertson’s Tiger Management. He left Tiger to launch Viking Global Investors in 1999. Viking currently has about $30 billion in assets under management. Since its inception, the hedge fund has gained $29.7 billion for investors. Last year, Andreas Halvorsen took home $470 million thanks to the impressive performance of his hedge fund.

6- Seth Klarman, The Baupost Group, $29.8 billion

Seth Klarman is the CEO and portfolio manager of the hedge fund he co-founded with William Poorvu and Howard Stevenson in 1982. Baupost gained $2.4 billion for investors in 2019 alone. Since its inception, the hedge fund has delivered net gains of $29.8 billion, making Klarman one of the most successful hedge fund managers of all time.

5- David Shaw, DE Shaw, $31.9 billion

According to LCH Investments, DE Shaw has delivered the fifth-highest returns since inception. David Shaw took home $335 million in 2019 as his hedge fund gained $2.8 billion for investors. He founded DE Shaw in 1988, and led it through 2001. In 2002, he appointed six managing directors to oversee the day-to-day operations. DE Shaw has delivered $31.9 billion in net gains for investors. David Shaw himself has a net worth of $7.3 billion.

4- Stephen Mandel, Lone Pine Capital, $33.2 billion

Stephen Mandel is another Tiger Cub on this list. Mandel left Tiger Management to launch Lone Pine Capital in 1997. Since launching the hedge fund, Mandel has delivered $33.2 billion in net returns. After struggling in 2018, Lone Pine gained $7.3 billion in 2019, becoming the second best performing hedge fund of the year. On the back of an impressive performance, Mandel earned $920 million in 2019.

3- Ken Griffin, Citadel, $35.6 billion

Ken Griffin has delivered net gains of $35.6 billion since founding Citadel in 1990. He continues to serve as the CEO of the $32.3 billion hedge fund. According to Bloomberg, Griffin was the third highest-paid hedge fund manager in 2019, earning $1.5 billion. Citadel’s Kensington and Wellington multi-strategy funds returned 19% last year.

2- George Soros, Soros Fund Management, $43.9 billion

In 2011, George Soros announced that he would return all outside money to investors, turning Soros Fund Management into a family office. Even LCH Investments stopped tracking the hedge fund’s performance at the end of 2017. The fact that Soros remains the second most successful hedge fund manager of all time nearly a decade after closing his hedge fund to outside investors speaks volumes about his track record. Since its inception in 1973, Soros Fund Management has delivered $43.9 billion in net gains for investors. Soros is often referred to as “The man who broke the Bank of England.” In 1992, he shorted $10 billion worth of pound sterling and made $1 billion during the UK currency crisis.

1- Ray Dalio, Bridgewater Associates, $58.5 billion

Ray Dalio has had a lackluster year in 2019. His $160 billion hedge fund delivered only $600 million in net gains. But the one-year performance had little impact on his long-term returns. Since launching Bridgewater Associates in 1975, Dalio has delivered $58.5 billion of gains. That’s much more than any other hedge fund in the world. Dalio handed off CEO duties in 2017 but remains as one of the firm’s primary investors as Co-CIO



About the Author

Vikas Shukla
Vikas Shukla has a strong interest in business, finance, and technology. He writes regularly on these topics. - He can be contacted by email at vshukla@valuewalk.com