Hedge funds are the wild cards of financial markets. Some sharply criticize their activities, but others say they bring valuable diversity to markets and act as shock absorbers against volatility.
The sector saw it’s best results since 2013 last year, producing an 8.5% return, up from 5.4% in 2016. But despite the stronger outlook, back-to-back losses in recent months caused by trade disputes, tech sector setbacks, and interest-rate hikes by the Federal Reserve have dampened returns.
Even in the midst of these adverse conditions hedge funds are still a formidable power, wielding billions of dollars in assets and significant influence in financial markets.
Here’s a list of the biggest funds in the US, created by data and research provider HFM Absoloute Return and ranked by assets under management (AUM).
10. Baupost Group - $29.5 billion AUM
Headquarters: Boston and London
Baupost Group is one of the largest hedge funds in the world. Founded in 1982 by a Harvard professor and his partners, the fund moved into Europe in 2011 to take advantage of opportunities from the government debt crisis there. Seth Klarman is president and CEO.
9. Davidson Kempner Capital Management - $30.9 billion AUM
Headquarters: New York
Davidson Kempner Capital Management is headquartered in New York with offices in Dublin and Hong Kong. The fund was founded in 1983 and has around 315 employees across its offices. Thomas L. Kempner, Jr. is a co-executive managing member.
8. Adage Capital Management - $32 billion AUM
Headquarters: Boston
This Boston-based fund focuses on managing S&P 500 assets, primarily for endowments and foundations like the American Red Cross and the Getty Foundation. They have a strong record on returns and have comfortably outperformed the S&P 500 index in each of the last 15 years. Phillip Gross is the managing director.
7. Millennium Management - $34.7 billion AUM
Headquarters: New York
The fund was founded in 1989 with $35 million dollars which has since ballooned to $34.7 billion. It has literally converted millions into billions. Israel Englander is cofounder, chairman, and CEO.
6. Elliott Management Corporation - $35 billion AUM
Headquarters: New York
The American company is often described as a vulture fund with over a third of its assets focused in distressed securities like debts of near bankrupt countries. It has consistently generated strong annual returns above the S&P 500 index. Paul Singer is CEO.
5. Two Sigma Investments - $37.2 billion AUM
Headquarters: New York
Two Sigma Investments, founded in 2001, is run by John Overdeck and David Siegal. It was reportedly named Two Sigma as a reference to choosing dual trading positions. The firm is known for using technology like artificial intelligence and algorithms to give it an edge.
4. JPMorgan Asset Management - $47.7 billion AUM
Headquarters: New York
The arm of JPMorgan is a leading global name in asset management. It has a diverse investment portfolio and a wide range of clients. Jamie Dimon is chairman and CEO of JPMorgan Chase and one of only a few chief executives to become a billionaire.
3. Renaissance Technologies - $57 billion AUM
Headquarters: New York
Renaissance Technologies was founded in 1982 by James Simons, an award-winning mathematician and Cold War code breaker. The company takes its lead from Simons and specializes in systematic trading, using mathematical models to make effective investments and trades.
2. AQR Capital Management - $89.98 billion AUM
Headquarters:Greenwich, Connecticut
The firm offers quantitatively driven investment opportunities for a range of clients, making both traditional and alternative investments. Cliff Asness is the founding and managing principal.
1. Bridgewater Associates - $124.70 billion AUM
Headquarters: Westport, Connecticut
The largest hedge fund in the world serves institutional clients including pension funds, endowments, foundations, foreign governments, and central banks. With about 1,700 employees it focuses on global macro investing, making bets based on inflation, currency exchange, and GDP. Ray Dalio is founder, co-chief investment officer, and co-chairman.