‘Billion Dollar Club’ of Hedge Funds Swells

Despite some high-profile redemptions and withdrawals in recent years, the group of the largest hedge fund investors continues to grow and consequently to have great influence over the industry, Amy Bensted, Preqin’s head of hedge fund products, said in a statement.

“These investors are increasingly using their collective might to lobby hedge fund managers to improve the alignment of interests between the two parties,” Bensted said.
“At a time when fund terms and conditions are in the spotlight, this will ultimately improve alignment for all institutional investors in the asset class.”

Billion Dollar Club: Managers

In 2016, hedge fund liquidations hit their highest number since the 2008 financial crisis as investors cringed at poor performance and high fees.

Some of the biggest hedge fund managers felt the effects of negative investor sentiment. Perry Capital, which managed as much as $15 billion in its heyday, closed down, and in March, Eton Park Capital Management, which had $8.8 billion under management in last year’s Preqin study, followed suit.

Against this backdrop, 701 hedge fund managers now manage $1 billion or more in assets, a net increase of 33 managers from Preqin’s year-earlier study. Collectively, this group managed $2.8 trillion, a 4% increase from the previous study and 88% of all capital in the hedge fund sector.

Where the biggest managers, ranked by aggregate assets, are located:

1. New York: 241 managers, $1 trillion

2. Connecticut: 43 managers, $360 billion

3. London: 84 managers, $352 billion

4. California: 53 managers, $191 billion

5. Massachusetts: 34 managers, $172 billion

6. Illinois: 25 managers, $99 billion

7. Hong Kong: 28 managers, $56 billion

8. Texas: 16 managers, $51 billion

9. New Jersey: 13 managers, $44 billion

10. Stockholm: 5 managers, $35 billion

The two biggest managers in the world are headquartered in Connecticut, which accounts for its high perch on the list.

Following are Preqin’s top 10 managers by assets:

1. Bridgewater Associates, U.S., $160.8 billion

2. AQR Capital Management, U.S., $96 billion

3. Man Group, U.K., $54.9 billion

4. Renaissance Technologies, U.S., $38.8 billion

5. Millennium Management, U.S., $34.1 billion

6. Standard Life Investments, U.K., $34 billion

7. Och-Ziff Capital Management, U.S., $33.5 billion

8. Winton Capital Management, U.K., $32.1 billion

9. Baupost Group, U.S., $31.6 billion

10. Elliott Management, U.S., $31.4 billion

Hedge funds appear to be on an upswing following a challenging 2016, according to Preqin research. First quarter asset flows were positive, and 43% of the largest hedge funds attracted new capital, compared with 39% that saw outflows.

Preqin said the renewed interest in hedge funds was driving Billion Dollar Club growth and may help to combat industrywide redemptions, as well as highlight the positive performance hedge funds have experienced since March 2016 and bolster the club’s influence within the industry.