Data released by LCH Investments on Monday shows that the top 20 hedge funds in the world by revenue produced $67 billion for investors in 2023—roughly three times the amount they returned in 2022. Activist TCI Fund Management led the pack.
Of the twenty funds, only two—Bridgewater Associates, headed by billionaire Ray Dalio, and Caxton—saw a loss.
All Weather, one of Bridgewater’s funds that tracks overall market movements and saw a 10.6% gain last year, is not included in the ranking.
The industry as a whole returned 6.4% last year, but the top 20 managers had gains of 10.5% on average, according to LCH.
The annual list was dominated by multi-strategy firms Citadel, Millennium Management, and D. E. Shaw, and billionaire Christopher Hohn’s TCI, which came in first place with 2023 returns of $12.9 billion after fees.
Despite holding just 4.6% of the industry’s assets under management, the trio produced 38.3% of the returns for the sector over the previous three years, according to a statement by LCH chairman Rick Sopher.
Leverage is often used extensively by multi-strategy hedge funds to boost returns. Because their fee structure covers the majority of their operating costs, the largest businesses can also afford to pay top cash for the greatest people.
The robust industry performance of 2022 was followed by a dismal 2022 in which the war in Ukraine and the Federal Reserve’s interest rate hikes to control inflation caused at least eight of the top 20 hedge funds to lose money.
A fund-of-funds company inside the Edmond de Rothschild Group, LCH Investments measures the annual returns of hedge funds to determine their cumulative lifetime gains, which is a crucial performance indicator for certain institutional investors.
Meetings with company executives, audits, and management reports, among other sources, are cited as sources.
Laptops 1000With $74 billion in earnings since its founding in 1990, billionaire Ken Griffin’s Citadel held the top spot in 2023. Citadel’s flagship fund saw a 15.3% return on investment last year, and the company chose to return almost $7 billion to investors.
For the first time since 2015, activist fund Pershing Square, run by William Ackman, made a comeback to the rankings. After generating $18.8 billion for investors since 2004, it ranked 20th in 2023.
Pershing Square recovered from a loss the year before, bringing its return to 26.7%, outpacing the gains made by the stock market as a whole.
