World’s largest hedge funds record bumper year of profits

on Jan23
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Signage for Citadel Investment Group LLC hangs outside their office in Chicago, Illinois, U.S.

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The world’s top hedge funds raked in record profits last year amid a resurgence in stock markets, new analysis showed.

The 20 leading fund managers made $67 billion in investor profits in 2023, up from the $65 billion recorded during the pandemic-era rally of 2021, according research Monday from LCH Investment, a fund of hedge funds.

Overall, the fund management industry recorded gains of $218 billion after fees, according to LCH Investments estimates.

The top funds — identified as those which have performed best in dollar terms since their inception — accounted for around one-third of annual profits last year, despite managing less than a fifth (19%) of the industry’s assets.

Included among the best performers were Christopher Hohn’s TCI, Ken Griffin’s Citadel and Andreas Halvorsen’s Viking.

Top 20 managers by 2023 profits

Firm Assets (billion) Net profits since inception (billion) 2023 profits (billion) Launch year
TCI $50 $41.3 $12.9 2004
Citadel $56.8 $74 $8.1 1990
Viking $30.5 $40.9 $6 1999
Millennium $61.9 $56.1 $5.7 1989
Elliott $62.2 $47.6 $5.5 1977
DE Shaw $43.8 $56.1 $4.2 1988
Lone Pine $15.9 $35.6 $4.2 1996
Baupost $27.4 $37 $3.8 1983
Pershing Square $17.9 $18.8 $3.5 2004
SAC/Point72 $31 $33 $3 1992
Appaloosa $17 $35 $2.7 1993
Farallon $40.4 $35.7 $2.6 1987
Och Ziff/Sculptor $28.7 $32.2 $2.3 1994
Egerton $14 $23.9 $2.3 1995
David Kempner $37 $21 $1.8 1983
King Street $9.5 $19.5 $0.9 1995
Brevan Howard $35.6 $28.5 $0.4 2003
Caxton $13.4 $19.5 $-0.3 1983
Bridgewater $72.5 $55.8 $-2.6 1975
Soros N/A $43.9 N/A 1973

Source: LCH Investments

LCH Investments’ director and head of research, Brad Amiee, said that the leading funds were buoyed by the stock market’s “fantastic run” in 2023. However, he added that many also showcased especially savvy stock selection strategies.

“You could argue that, since shorting is such a challenging sub-strategy, keeping things long-biased and having a concentrated position in high quality positions has been the way to go,” Amiee told the Financial Times.

TCI, the top ranking fund, recorded investor profits of $12.9 billion and ended last year up 33%, beating the S&P 500’s 24% gain.

Included in its largest holders were Alphabet, Canadian National Railway, Visa and General Electric.

Citadel, which ranked second in 2023, made $8.1 billion in profits after bringing in a record-breaking $16 billion in 2022. Its $74 billion in gains since inception rank it as the most successful hedge fund in history.

The research also found that the top 20 funds have made a combined $755.4 billion in profits since inception, well above the $655.5 billion in total managed assets.

A hedge fund is a limited partnership of private investors whose money is managed by fund managers. Hedge funds are typically know for investing in higher risk and more non-traditional assets compared to mutual funds.

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