The Top 10 Largest Hedge Funds in the World

Written by Jake Mann, WealthLift Finance Editor in Featured, Stock Market News | 0 comments

In the financial press, hedge funds are given ink for a variety of reasons.  Several hedge fund managers like George Soros and David Einhorn, have consistently earned investors yearly returns north of 20 percent.  Conversely, some of the greatest financial follies have also occurred in the hedge fund industry, whether it be the collapse of Long Term Capital Management or the Ponzi-scheme fallout of Bernie Madoff’s Ascot Partners.  Though they are usually perceived as unregulated, risky investment vehicles for the most affluent investors, the truth is a little more complicated.  A hedge fund is a type of investment fund that is actively managed, in the hope that higher than market returns can be realized.  Usually open to a limited number of investors, these funds typically have net worth requirements greater than $1 million for investors.  Currently, it is estimated that the world’s 200 largest hedge funds oversee nearly $700 billion in assets, with some funds obviously being much larger than others.  The slideshow below gives readers insight into just how enormous these funds really are, and how their managers use an array of strategies to beat the market.

• Introduction

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  Hedge fund managers are some of the most successful investors in the financial world. By learning more about their strategies and operations, individuals too can manage their portfolios with confidence. Without further ado, here are the ten largest hedge funds in the world in terms of assets under management (AUM).

  

• #10: BlueCrest Capital Management

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  Originally founded in 2000 by Bill Reeves and Michael Platt, this London-based mega fund has returned 14.92 percent a year since its inception. With $25 billion in assets under management, BlueCrest focuses on investment opportunities in the U.S. and Eurozone, with a penchant for currency trading.

  

• #9: Highbridge Capital Management

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  Based in New York, the HQ for American hedge fund managers, Highbridge has $26 billion in AUM. Founders Glen Dubin and Henry Swieca use a variety of tactics to generate a positive return for their investors including: long/short strategies, interest rate arbitrage, and currency arbitrage.

  

• #8: Winton Capital Management

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  Much like the investors in the picture above, Winton Capital uses futures trading as its primary investment strategy. The fund, which is located in London, was founded by David Harding in 1997 and has $27 billion in AUM.

  

• #7: BlackRock Advisors

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  This NYC-based fund was founded by Larry Fink and Robert Kapito. With $27.7 billion in AUM, BlackRock Advisors averages a 50.4 percent return after market bottoms, holding true to the old investing proverb: be greedy when others are fearful.

  

• #6: Paulson & Co.

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  With a net worth north of $12 billion, John Paulson is one of the richest businessmen in America. Interestingly, he is also quite the contrarian, making most of his money by shorting subprime mortgages right before the housing market collapse of 2007. His Wall Street fund has $28 billion in AUM, and also has an affinity for investing in gold bullion and gold mining stocks.

  

• #5: Och-Ziff Capital Management

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  Och-Ziff is a globally focused hedge fund with operations in merger arbitrage and equities. Founder Daniel Och is one of the highest paid managers in the business, netting almost $1 billion in total compensation each year. Och-Ziff has $28.1 billion in AUM, returns between 10 and 20 percent annually, and is the only publicly traded hedge fund (NYSE: OZM).

  

• #4: Brevan Howard Asset Management

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  This London-based firm was founded by Alan Howard and Jean-Phillippe Blochet, and has over $36 billion in AUM. Brevan takes a top-down approach, using macroeconomic analysis to find investment opportunities in any markets. Through the heart of the financial crisis, in 2008 and 2009, it outperformed the broader markets by 44.2 percent.

  

• #3: JP Morgan Asset Management

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  A division of JPMorgan Chase (NYSE: JPM), its asset management division oversees $46.6 billion in AUM. The department has its hands in everything from real estate to the private equity markets. Interestingly, it regularly trades with other areas of JPM, and profited by nearly $400 million from the $2 billion London Whale fiasco.

  

• #2: Man Group

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  Originally founded by James Man in 1783, Man Group is one of the oldest and most profitable hedge funds in the world. The London-based fund specializes in futures trading and traditional long equity investments and has over $64 billion in AUM.

  

• #1: Bridgewater Associates

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  Founded by Ray Dalio in 1975, Bridgewater Associates is uniquely located in the forests of Connecticut. With a total AUM of $77.6 billion, the fund has returned an average of 18 percent per year. Bridgewater uses a macroeconomic event-driven strategy by choosing investments that will respond favorably to market conditions that its analysts forecast.

  

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For a more detailed look at the history of hedge funds and the strategies they employ, check out WealthLift’s Hedge Fund Educational Series here.

Disclosure: The author has no holdings in the stocks mentioned in this article and has no plans to initiate any positions within the next 72 hours.  He does, however, have the intention of rating these stocks on WealthLift.com, a social media website where investment ideas are shared openly and free.

Jake Mann is a Finance Editor at WealthLift.com, having recently graduated Illinois Wesleyan University with a double major in Economics and Business Administration. In his spare time, Jake enjoys playing guitar, partaking in good ‘ole fantasy baseball, and being an alumni of Tau Kappa Epsilon.

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