Ken Griffin’s US hedge fund Citadel made $16 billion in net-of-fees profits last year. This is, according to investor estimates, the largest annual profit ever made by the hedge fund his manager.
Citadel has become the top 20 hedge, surpassing John Paulson’s $15 billion profit in 2007, previously described as “the biggest deal in history,” according to a report released Monday by fund of funds LCH Investments. It topped the list of fund managers, said LCH Chairman Rick Soffer. .
Overall, the top 20 managers will earn $22.4 billion net of fees to investors in 2022, and $691.6 billion net of fees to investors since inception. LCH estimates the top 20 funds’ return last year at 3.4% of his, while the remaining funds lost 8.2% of his.
Overall, hedge fund managers lost $208 billion last year, bringing their net profit since inception to $1.42 trillion, of which 48.7% came from the top 20 managers.
As a fund of funds, LCH Investments was able to estimate the profits from its investment activities by these industry leaders.
“We’ve invested in many or most of the top 20 managers, which has allowed us to reach out to them and get information that isn’t available to the public,” says Sopher.
He explained that Citadel’s record profits are due to being a “diversified company with multiple profit streams and aggressive capital allocation and risk management.”
“The rise in the rankings over the past few years has been spectacular,” he added, noting that Citadel ranked second on the 2021 Top 20 list.
top 5 hedge fund managers
| Hedge fund | fund manager | 2022 net income ($ billion) | net profit since inception (Billion USD) |
|
Citadel |
Ken Griffin |
16 |
65.9 |
|
bridgewater |
Ray Dalio/Bob Prince, Greg Jensen |
6.2 |
58.4 |
|
DE show |
various |
8.2 |
51.9 |
|
millennium |
israel english |
8 |
50.4 |
|
Soros Fund Management* |
George Soros / Various |
none |
43.9 |
| Source: LCH Investments | *Indicates profits frozen when all external capital is returned |
“In 2022, big multi-strategy hedge funds such as Citadel, DE Shaw and Millennium are again the biggest winners,” Soffer said. “In total, these managers have generated $32 billion in net income and have been able to combine strong performance from several sources including macro, trading, quant and equity diversification strategies.”
Sopher said some funds performed well and others struggled last year due to variations between managers managing multi-strategy, macro funds and equity long/short strategies. .
“many [equity long/short] Managers were unable to anticipate or adequately hedge the impact of rising interest rates and were unable to generate sufficient profits to compensate for their short side.
“If there is a lot of divergence and the stock market goes down again, it will probably happen again,” he said.
Sopher said some managers may be able to grab a quick grab at the big event.
“What I feel from our managers is that it is very likely that we will see a major shock this year or in the next few years, due to the financial situation and system leverage.”
