By Steve Goldstein
Top 20 hedge funds of all time returned 13% last year, LCH says.
The top 20 hedge funds of all time outperformed their rivals last year. But they still trailed a simple 60/40 model that is far less expensive.
LCH Investments released its annual list of the top 20 money managers of all time, who have made $855 billion cumulatively and $94 billion last year for their investors.
These firms – led by Ken Griffin’s Citadel; D.E. Shaw; and Israel Englander’s Millennium – collectively generated 13.1%, outperforming the average hedge fund which scored gains of 8.1% last year, LCH said.
As good as that is, a simple 60% stocks/40% bonds model using the Vanguard total stock market fund VTI and the Vanguard total bond market fund BND would’ve returned just under 15% in 2024, according to the Lazy Portfolio ETF site.
Manager Portfolio Manager(s) End-2024 AUM ($bn) Net Gains Since Inception ($bn) to end-2024 2024 Net Gains ($bn) Year of Inception Citadel Ken Griffin 64.9 83 9 1990 D.E. Shaw Various 41.1 67.2 11.1 1988 Millennium Israel Englander 74 65.5 9.4 1989 Bridgewater Ray Dalio 65.3 63.5 7.7 1975 Elliott Paul Singer 72 53.8 6.2 1977 TCI Christopher Hohn 57.6 49.5 8.2 2004 Viking Andreas Halvorsen 34.6 44.5 3.6 1999 Soros* George Soros n/a 43.9 n/a 1973 Farallon Tom Steyer / Andrew Spokes / Nicolas Giauque 43.4 41 5.3 1987 Lone Pine Steve Mandel / David Craver, Kelly Granat 18.2 40.6 5 1996 Baupost Seth Klarman 25.5 39.1 2.2 1983 SAC/Point 72 Steve Cohen 35.2 38 5 1992 Appaloosa David Tepper 16.3 36.9 1.9 1993 Och Ziff/Sculptor Daniel Och/Jimmy Levin 29 35.5 3.3 1994 Brevan Howard Alan Howard 34.5 30.5 2 2003 Marshall Wace Paul Marshall, Ian Wace 45 29.5 4.5 1997 Egerton John Armitage 15.2 27.1 3.2 1995 Davidson Kempner Marvin Davidson, Thomas Kempner / Anthony Yoseloff 37 24.5 3.5 1983 Caxton Bruce Kovner / Andrew Law 13.9 20.7 1.2 1983 Pershing Square Bill Ackman 17.1 20.2 1.4 2004 TOTAL 739.8 854.5 93.7 Source: LCH Investments estimates; * - denotes gains frozen when outside capital returned
The giant hedge funds on the LCH list typically are now multi-manager strategies – ones where the firm divides up money across tens or hundreds of teams to produce uncorrelated returns, typically with tight risk controls and aggressive personnel management.
“The greatest gains in dollar terms were generated once again by the large firms which allocate on a multi-manager basis mainly to internal teams, Citadel, D.E. Shaw and Millennium,” said Rick Sopher, chairman of LCH Investments.
Stock-market funds that were long-biased also did well in a year of strong returns for the stock market, Sopher said.
LCH also analyzed fees. It estimated that, since inception, these funds have charged investors $1.8 billion, accounting for 48% of the gross gains. Over the last two decades in particular, fees have represented 50% of gross gains, LCH said.
The two Vanguard funds each have an expense ratio of 0.03%
-Steve Goldstein
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01-20-25 1047ET
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