According to LCH investment data, the world’s 20 best performing hedge funds earned $65.4 billion for clients in 2021, on the back of stock markets rising despite setbacks introduced by coronavirus pandemic.
As a group, the most successful managers earned more than one third of the $176 billion that all hedge funds made in 2020, reported LCH Investments, a fund of funds firm that tracks returns and is part of Edmond de Rothschild group.
The top 20, including brand-name investment firms TCI Fund Management and Citadel, returned an average of 10.5% and jointly managed nearly one fifth of the industry’s $3.6 trillion in assets, shows the data.
Incidentally, their returns were behind broader stock market gains.
“The net gains generated by the top 20 managers for their investors … were the highest ever,” topping 2020’s gains which also set a record, said Rick Sopher, LCH’s chairman.
In 2021, there was a shake-up among the very best performers with TCI Fund Management earning $9.5 billion and while Citadel raked in $8.2 billion, with these two hedge funds ranking as the top two.
2020’s winner, Coleman’s Tiger Global, which earned $10.4 billion in 2020, posted $1.5 billion in losses this year.
Israel Englander’s Millennium, which also ranked at the top of the list in 2020 with a $10.2 billion gain, posted a $6.4 billion gain in 2021.
Bridgewater, the world’s biggest hedge fund, returned sharply with a$5.7 billion gain having posted disappointing losses in 2020.
Third Point, which pursues a range of strategies including activist investing, broke into the top twenty with a gain of $3.3 billion.
Representatives for the hedge funds declined to comment.
Although many hedge funds earned billions, stock oriented hedge funds largely lagged behind the broader stock market S&P 500 index’ 27% gain in 2021.
They “generally did not fully capture the spectacular returns available in equity markets,” said Sopher while adding “their low net exposure and a difficult environment for short selling limited their returns.”