In this article, we will take a look at 15 of the biggest hedge funds in the USA. If you want to see more of the biggest hedge funds in the USA, go directly to 5 Biggest Hedge Funds in USA.
Hedge funds are pooled funds that trade in relatively liquid assets and that can use sophisticated tools to try to improve their performance on a risk adjusted basis. Generally only sophisticated investors such as high net worth individuals and institutions can invest in hedge funds.
Different hedge funds have different strategies of investing. Some hedge funds are activists and try to get companies to change their strategy to unlock value. Other hedge funds are more value oriented and buy deep value stocks. Yet other hedge funds will try to use an algorithmic approach to investing and try to create very sophisticated computer models that tell them when to buy certain stocks and when to sell certain stocks. Because many hedge funds hedge their investments, they may not outperform the market at times because they take theoretically less risk.
New York Stock Exchange
Image: flickr.com
History of Hedge Funds
The first hedge fund began when Alfred Winslow Jones created A. W. Jones & Co as a partnership between Jones and four friends. Jones’ fund invested $100,000 in stocks and used debt along with long and short positions to try to beat the market. Jones also charged a manager’s fee of 20% of the profits, something that is still practiced even today among many funds.
In 1968, the number of hedge funds grew to 140 and the field expanded even further given the success of hedge fund managers George Soros and Julian Robertson in the early 1980s. Given the more recognition, more high net worth individuals were interested in investing.
The industry grew even further in the 90’s given the bull market as the assets managed by hedge funds rose form $38.9 billion in 1990 to $536.9 billion in 2001.
As of 2022, the hedge fund industry is even bigger than what it was in 2001. According to Barclay Hedge, the total assets under management of hedge funds was $4.87 trillion in the second quarter of 2022. In terms of the different types of hedge funds, fixed income hedge funds had the most collective AUM at $917.9 billion followed by balanced hedge funds which invest in stocks & bonds with cumulative AUM of $768.9 billion.
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2022
In terms of 2022, the markets have been pretty difficult given that the Federal Reserve has increased interest rates substantially.
Given that inflation has increased substantially, the Federal Reserve has committed to fight the inflation increase. Federal Reserve Chairman Jerome H. Powell said in August 26, 2022,
The Federal Open Market Committee’s (FOMC) overarching focus right now is to bring inflation back down to our 2 percent goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. The burdens of high inflation fall heaviest on those who are least able to bear them. Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth.
Given the increase in rates, the S&P 500 is down 22% year to date and many hedge funds have not done well this year either although some of the leading hedge funds still have great long term track records.
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Methodology
For our list of 15 Biggest Hedge Funds in USA, we took the top 15 hedge funds by AUM based in the United States from the Top 100 Hedge Fund Manager Managers by Managed AUM list by SWFI. We then reranked the top 15 using publicly available AUM data. Although this list may not be complete, it includes many of the biggest hedge funds in the USA.
15 Biggest Hedge Funds in USA
15. Haidar Capital Management
Assets Under Management: $5 billion
Haidar Capital Management is a hedge fund based in New York that takes a discretionary global macro institutional investment approach. According to the fund, it ‘continuously seeks to adapt to changing financial market conditions and bases its positioning on the firm’s global view of economic data, geopolitical risks, and fiscal and monetary policies.’ Founded in 1997, Haidar Capital Management has $5 billion in assets under management.
14. Garda Capital Partners
Assets Under Management: $8 billion
Garda Capital Partners is a hedge fund with headquarters in Minneapolis with over $8 billion in institutional assets as of September 30, 2022. In terms of its strategy, Garda Capital Partners’ fixed income relative value strategy ‘captures opportunities in global interest rate disparities and sovereign debt instruments across developed markets.’ The fund, which has a 18 year track record through many market cycles, ranks #15 on our list of 15 Biggest Hedge Funds in USA.
13. ExodusPoint Capital Management
Assets Under Management: $14 billion
ExodusPoint Capital Management is a multi-strategy, global hedge fund firm founded in 2018 that’s based in New York. When it launched, ExodusPoint Capital Management was the largest hedge fund launch in history with $8 billion. Recently according to Bloomberg, ExodusPoint is benefiting from being a multi-strategy firm as it is ‘snapping up hedge fund talent as investors pour money into them and shift capital away from single-strategy investment firms.’ As of September 2021, ExodusPoint Capital Management had $14 billion in assets under management. According to Bloomberg, ExodusPoint was also up 5% through August of this year.
12. Lighthouse Investment Partners
Assets Under Management: $14.4 billion
Lighthouse Investment Partners is a global investment firm based in New York that offers hedge fund solutions that tries to generated uncorrelated risk‑adjusted returns for investors. According to the company, Lighthouse Investment Partners has $14.4 billion in total assets as of September 30, 2022. Lighthouse Investment Partners also has 26 years of investment experience, 226 employees, and 83 investment professionals.
11. Element Capital Management
Assets Under Management: $15 billion
Element Capital Management, headquartered in New York, is one of the world’s largest macro hedge funds. The fund, run by Jeffrey Talpins, had a great run for 16 years after it was founded with average annual gains of over 18%. Due to strong demand, Element Capital Management increased its performance fee to 40% from the previous 25% in 2019. Like many other investors, however, Element Capital Management was negatively affected by the bond market changes in October of 2021 and the fund fell around 9% in 2021.
10. Balyasny Asset Management
Assets Under Management: $15.7 billion
Balyasny Asset Management is a hedge fund based in Chicago that invests using a variety of strategies including equities long/short, macro, and commodities. In addition to investing in public companies, Balyasny Asset Management has also invested in several leading private companies such as Databricks and Klarna. As of May 2022, Balyasny Asset Management had $15.7 billion in assets under management up from $11 billion in 2018. The firm also has 1,100 employees including 470 investment professionals.
9. Viking Global Investors
Assets Under Management: $37 billion
Viking Global Investors is a hedge fund based in Greenwich, Connecticut that has a strong track record. In terms of its investment process, Viking Global Investors evaluates a wide spectrum of investment opportunities globally and the fund uses research intensive investment processes to invest in the attractive ideas. Among other things, the fund uses its sector and company specific knowledge to assess the strength of a company’s management team, understand near and medium term trends, evaluate long term industry trends, and determine valuations. As of 9/30/22, Viking Global Investors manages over $37 billion in capital.
8. Adage Capital Management
Assets Under Management: $42 billion
Adage Capital Management is a hedge fund based in Massachusetts that is managed by Phillip Gross and Robert Atchinson. According to Crunchbase, Adage Capital Management focuses on managing S&P 500 assets and it also does early stage venture, late stage venture and private equity investing. In terms of its clients, Adage Capital Management helps manage money for endowments and foundations and other investors. With an AUM of $42 billion, Adage Capital Management ranks #8 on our list of 15 Biggest Hedge Funds in USA.
7. Elliott Management Corporation
Assets Under Management: $55.7 billion
Elliott Management Corporation is a Florida headquartered fund that provides portfolio management and consulting for pensions, sovereign wealth funds, endowments, high net worth individuals and more. As of June 30, 2022, Elliott Management Corporation had $55.7 billion in assets under management and also a staff of 499 people. In terms of its strategy, Elliott Management Corporation, “trades in securities across the capital structure and often will take a leading role in event-driven situations to create value or manage risk.” In the financial markets, Elliott Management’s fund manager Billionaire Paul Singer is known for being an activist whose fund can buy entire companies or take smaller positions in companies and ask for changes.
6. Millennium Management
Assets Under Management: $56 Billion
Millennium Management, headquartered in New York, is a leading hedge fund with $56 billion in assets under management. In 2022, Millennium Management said it will be returning $15 billion to investors at the end of 2022 after the fund also returned $15 billion in 2021. While Millennium Management has returned the capital, the fund’s clients have the option of re-investing the capital in a special share class that allows them to withdraw 5% in a quarter. Millennium Management is doing so to find ways to extend its retained capital so it can attract investment professionals and also have more flexibility in terms of making internal investments. In terms of its performance, Millennium Management’s flagship fund rose 9.7% through September.
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Disclosure: None. 15 Biggest Hedge Funds in USA is originally published on Insider Monkey.
