(Bloomberg) — Ken Griffin’s Citadel churned out a document $16 billion in revenue for shoppers final 12 months, outperforming the remainder of the business and certainly one of historical past’s most profitable monetary performs.
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The highest 20 hedge fund companies collectively generated $22.4 billion in revenue after charges, in line with estimates by LCH Investments, a fund of hedge funds. Citadel’s acquire was the most important annual return for a hedge fund supervisor, surpassing the $15 billion that John Paulson generated in 2007 on his guess in opposition to subprime mortgages. This was described because the “best commerce ever” in a subsequent ebook of the identical identify by Gregory Zuckerman.
But it surely’s a unique story exterior the business giants, with hedge funds total dropping $208 billion final 12 months as many managers discovered themselves on the unsuitable aspect of world market turmoil. LCH estimated a return of three.4% on the prime 20 managers — whereas the remainder of funds it studied suffered losses of 8.2%.
“The biggest features have been as soon as once more made by the big multistrategy hedge funds like Citadel, DE Shaw and Millennium,” LCH Chairman Rick Sopher stated in an announcement. “The sturdy features they’ve generated lately mirror their growing dominance in methods which don’t depend upon rising asset costs, and their substantial dimension.”
LCH’s annual rating is only one means to take a look at the efficiency of hedge funds, the place managers are sometimes measured by their total features since inception. The rating, which was first revealed in 2010, could exclude newer or smaller hedge funds that outperformed on a share foundation.
The findings additionally mirror the rising clout of multistrategy hedge fund companies, that are on the cusp of taking up equity-focused funds to develop into the dominant technique within the business. Their rising belongings and better charges are serving to them win an costly battle to rent and retain prime merchants.
LCH estimated that the business has produced features in extra of $1.4 trillion for shoppers since inception. The highest 20 managers, which oversaw virtually 19% of the business belongings, produced $692 billion of that revenue, or 49% of the entire.
Supply: LCH Investments
Features are in billions of {dollars}. *denotes features frozen when all exterior capital returned
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