Ken Griffin’s U.S. hedge fund Citadel made $16 billion in revenue after charges final 12 months – the biggest annual revenue ever made by a hedge fund supervisor, an investor has estimated.
In a report revealed on Monday by fund of funds LCH Investments, Citadel topped the highest 20 hedge fund supervisor’s listing beating John Paulson’s 2007 $15 billion achieve, which has till now been described as “the greatest trade ever,” stated Rick Sopher, LCH chairman.
Overall, the highest 20 managers made $22.4 billion internet of charges for his or her buyers in 2022 and have made $691.6 billion internet of charges for his or her buyers since inception. LCH estimates a 3.4% return for the highest 20 funds final 12 months, whereas the remainder made losses of 8.2%.
Hedge fund managers general misplaced $208 billion final 12 months, bringing internet beneficial properties since inception to $1.42 trillion, of which 48.7% has been made by the highest 20 managers.
As a fund of funds, LCH Investments was in a position to estimate the beneficial properties by these trade giants from its personal investing exercise.
“We’ve been invested with many or most of the managers in the top 20 and that has enabled us to get close to them, get the information that isn’t generally published,” Sopher stated.
He defined Citadel’s report achieve was all the way down to being a “diversified firm with multiple sources of profits and active capital allocation and risk management.”
“Their progress up the rankings in the past few years has been remarkable,” he added, noting that Citadel ranked quantity 2 on the highest 20 listing in 2021.
Top 5 hedge fund managers
| Hedge Fund | Fund Manager |
2022 internet beneficial properties ($ billion) |
Net revenue since inception ($ billion) |
| Citadel | Ken Griffin |
16 |
65.9 |
| Bridgewater | Ray Dalio / Bob Prince, Greg Jensen |
6.2 |
58.4 |
| DE Shaw | Various |
8.2 |
51.9 |
| Millenium | Israel Englander |
8 |
50.4 |
| Soros Fund Management* | George Soros / Various |
n/a |
43.9 |
| Source: LCH Investments | *denotes beneficial properties frozen when all outdoors capital returned |
“In 2022, the largest gains were once again made by the large multi-strategy hedge funds like Citadel, DE Shaw and Millennium,” Sopher stated. “These managers collectively generated $32.0 billion of net gains and were able to combine strong performances from several sources including macro, trading, quant and equity dispersion strategies.”
Sopher stated the dispersion between managers operating multi technique and macro funds and fairness lengthy/brief methods precipitated some funds to do effectively final 12 months and a few to wrestle.
“Many [equity long/short] managers failed to anticipate or adequately hedge against the impact of rising interest rates and were unable to generate sufficient profits to compensate on the short side,” he stated.
“If there’s a lot of dispersion and equity markets fall again, probably we’ll see the same again,” he stated.
Sopher stated some managers might be able to seize rapidly on huge occasions.
“What I do sense from our managers is that the possibility of a major shock this year or in the coming years is quite high because of the state of public finances, leverage in the system.”
www.marketwatch.com
