Top hedge funds earned US$63.5b in 2020, highest in decade: LCH data

Boston

THE world's 20 best-performing hedge funds earned US$63.5 billion for clients in 2020, setting a record for the last 10 years during a chaotic time when technology-oriented stocks led a dramatic rebound from a pandemic induced selloff, LCH Investments data show.

As a group, the most successful managers earned half of the US$127 billion that all hedge funds made last year, LCH Investments, a fund of funds firm that tracks returns and is part of the Edmond de Rothschild group, reported.

Despite the pandemic that triggered a historic stock market sell-off in March, shut down large sectors of the economy and swallowed up millions of jobs, the 20 best hedge funds topped their 2019 returns of US$59.3 billion. That was despite 2020 not being as profitable as the previous year for hedge funds as a whole, which saw earnings fall from US$178 billion in 2019.

The average hedge fund returned 11.6 per cent in 2020, according to Hedge Fund Research data, lagging behind the S&P 500 index' 16 per cent gain.

"The net gains generated by the top 20 managers for their investors of US$63.5 billion were the highest in a decade. In that sense, 2020 was the year of the hedge fund," Rick Sopher, LCH's chairman, said in a statement.

Last year's biggest earners include Chase Coleman's Tiger Global, which earned US$10.4 billion; Israel Englander's Millennium, which earned US$10.2 billion; and Steve Mandel's Lone Pine with US$9.1 billion. Andreas Halvorsen's Viking Global Investors earned US$7.0 billion and Ken Griffin's Citadel earned US$6.2 billion, according to LCH.

Ray Dalio's Bridgewater Associates, founded in 1975, held on to the No 1 ranking since inception, with US$46.5 billion earned, even after a terrible 2020 during which LCH data show Mr Dalio lost US$12.1 billion.

George Soros's Soros Fund Management, which no longer manages money for outside clients, held on to the No 2 spot followed by Mr Mandel, Mr Griffin and managers at DE Shaw which rounded out the top five performers of all time.

Jim Simons's Renaissance Technologies, often ranked among the world's most successful funds because of its Medallion portfolio returns, dropped out of the top 20 performers after the funds it offers to outsiders fell between 20 and 30 per cent last year. REUTERS