Business Maverick

Business Maverick

Hedge-Fund Titans Hohn, Mandel Lead $178 Billion Year of Profits

A collection of U.S. one dollar bills are seen in this arranged photograph in London, U.K., on Friday, Jan. 29, 2016. The International Monetary Fund extolled the potential benefits of virtual currencies and said they warrant a more nuanced regulatory approach, at a time when the future of bitcoin, the most well-known example, is in doubt's. Bitcoin traded at about $379 on Jan. 20, about a third of its peak in 2013. Photographer: Chris Ratcliffe/Bloomberg

Billionaire money managers Chris Hohn and Stephen Mandel led hedge fund gains last year as surging markets helped the $3 trillion market post its best performance in a decade.

The industry racked up gains worth $178 billion after fees, according to estimates by LCH Investments, a fund of hedge funds. Hohn’s TCI Fund Management made $8.4 billion for clients, while Mandel’s Lone Pine Capital enriched investors by $7.3 billion.

The annual survey focuses on managers with the most overall profits since inception, a ranking where the largest and oldest hedge funds tend to do best. The top 20 managers, who oversee less than a fifth of the industry’s assets, generated a third of the gains for investors last year.

“Several managers in the top 20 recorded very strong gains in 2019, especially those that were positioned net long equities,” Rick Sopher, chairman of LCH, said in a statement.

Hedge funds have been pitted against the longest-running bull market in stocks, leading them to fall behind cheaper index funds tracking market returns year after year. While those betting on rising and falling stocks gained 13.7% last year, they fell way behind the 31.5% surge in the S&P 500 index.

TCI, which runs a long-biased activist fund and gained 41% in 2019, its best annual performance in six years, returned to the top 20 ranking after a one-year absence. John Armitage’s Egerton Capital also rejoined the club.

Ray Dalio’s Bridgewater, whose main fund last year suffered its first loss since 2000, topped LCH’s ranking for the most profits since inception. Since the date of launching, all hedge funds have made a total $1.28 trillion for their clients. About 44% of the gains, or $558 billion, has been generated by the top 20.

LCH also estimated that the top managers have made a combined $62.5 billion in donations or commitments to philanthropy and charitable causes. That “represents approximately 45% of the fees their firms have earned since inception,” Sopher said.

Top 20 Managers Ranked by Profits in 2019

Manager Net Gains Since Start 2019 Gains Launch Year
TCI 22.8 8.4 2004
Lone Pine 33.2 7.3 1996
Renaissance Technologies 22.3 5.6 2005
Egerton 18.9 5 1995
Citadel 35.6 4.9 1990
Viking 29.7 4.3 1999
Farallon 26.4 3.7 1987
Millennium 25.8 3.4 1989
Elliott Associates 28.3 3.2 1977
DE Shaw 31.9 2.8 1988
Baupost 29.8 2.4 1983
SAC/Point 72 23.4 2.3 1992
Appaloosa 26.7 1.5 1993
Och Ziff/Sculptor 27.5 1.3 1994
Paulson 19 1.1 1994
Brevan Howard 19.6 0.8 2003
Moore 18.6 0.3 1990
King Street 15.9 0.3 1995
Bridgewater 58.5 0.6 1975
Soros Fund Management* 43.9 N/A 1973
Top 20 Managers 557.8 59.3
All Managers 1275 178

NOTE: Gains are in billions of dollars; * Through Dec. 31, 2017; Source: LCH, eVestment

Gallery

Please peer review 3 community comments before your comment can be posted

X

This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.


Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Become a Maverick Insider

This could have been a paywall

On another site this would have been a paywall. Maverick Insider keeps our content free for all.

Become an Insider

Every seed of hope will one day sprout.

South African citizens throughout the country are standing up for our human rights. Stay informed, connected and inspired by our weekly FREE Maverick Citizen newsletter.