Major hedge funds reap biggest gains in decade during pandemic



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The 20 most successful hedge fund managers of all time grossed investors $ 63.5 billion during the coronavirus market turmoil in 2020, making it the industry’s best year of earnings in a decade. decade, despite 12 difficult months for US giants Bridgewater Associates and Renaissance Technologies.

The top 20 managers, led by funds like Chase Coleman’s Tiger Global and Izzy Englander’s Millennium Management, made half of the hedge fund industry’s overall gains last year, according to a study by LCH Investments – a fund of hedge funds managed by the Edmond de Rothschild group. .

The gains highlight how some of the biggest names in the industry were able to handle the volatility of the past year, in which the S&P 500 recorded its fastest descent in a bear market. Many were able to take advantage of the opportunities presented by the March liquidation and the huge recovery in risky assets that followed. In 2019, the top 20 managers achieved around a third of the sector’s overall gains.

“Managers able to differentiate between winners and losers in the sector have achieved spectacular gains [in 2020]Said Rick Sopher, president of LCH, adding that human traders often outperform computerized strategies.

The optimistic performance of some hedge funds comes after years of often moderate returns. Ken Heinz, president of the HFR Data Group, said last year “has to be one of the best if not the best in the business.”

Mr. Coleman’s New York-based Tiger Global, a so-called Tiger cub created by managers from Julian Robertson’s Tiger Management, entered the top 20 silver producers of all time at the 14th square. He made $ 10.4 billion in profit after betting on rising stock prices, according to LCH, the highest gain among the top 20.

Jim Simons’ rebirth was dropped from the top 20, after his Institutional Diversified Alpha fund lost 32% and his Institutional Equities fund lost 20%, according to figures sent to investors, one of many quantitative funds to lose money.

Ray Dalio’s Bridgewater has also suffered, losing $ 12.1 billion to investors last year after being hit by the market sell-off. Mr Dalio told the Financial Times last March that “we have stayed in our positions and in retrospect we should have reduced all the risks”. Its Pure Alpha fund, which seeks to take advantage of macroeconomic trends, lost 7.6% last year, while its All-Weather funds gained 9.5%. Despite its losses last year, Bridgewater has remained at the top of the all-time manager list since its inception with $ 46.5 billion in profits.

Mr. Englander’s Millennium, which manages $ 46.7 billion in assets and made $ 10.2 billion last year, is among other profitable funds, according to LCH. The fund, which limited losses during the spring market turmoil, made about 25% last year, including large gains in December, according to figures sent to investors. These gains have helped lift it to seventh on the earnings list since its inception, up from 12th last year.

Ken Griffin’s Citadel, which manages $ 30 billion in assets, achieved a 24.4% return in his Wellington fund, said a person who had seen the numbers, and $ 6.2 billion in earnings l last year, according to LCH. Steve Mandel’s Lone Pine earned $ 9.1 billion, which took him from third to fourth on the all-time list.

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