Billion-Dollar Hedge Funds Grow 8%, Led By Bridgewater

Oct 4 2011 | 12:50pm ET

The markets offered hedge funds little good news in the first half, but investors continued to flock to the largest players in the industry.

U.S. hedge funds with at least $1 billion in assets managed a combined total of $1.399 trillion at the beginning of July, led by the largest American hedge fund, Bridgewater Associates, AR magazine's semi-annual Billion Dollar Club survey shows. The $102 billion jump amounts to an 8% increase since the beginning of the year. Globally, the industry grew even more, adding 18.6% to rise to $2.16 trillion.

The Billion Dollar Club grew in numbers as well as assets, AR reports. There were 16 more such funds on July 1 than on Jan. 1, with a total of 241. Still, both in terms of numbers and assets, the club remains far short of its peak in the middle of 2008, when 268 American hedge funds managed $1.675 trillion.

There was little change in the top 10. Bridgewater and JPMorgan Chase held on to the top two spots, with both posting big increases in AUM: The former added 19.35%, or $11.4 billion, and the latter 21%—most of it in JPMorgan products, with only a $2 billion bump for its Highbridge Capital Management unit.

Paulson & Co. also held onto its spot, third, despite a 2% drop in assets. BlackRock rose one spot and Och-Ziff Capital Management held at fifth to round out the Billion Dollar Club top five.

The top 10 featured one new name: Renaissance Technologies, which entered a tie for ninth place with Farallon Capital Management with $20 billion in assets under management.

There was something of a shakeup in the rest of the list, thanks in part to several high-profile exits from the hedge fund industry and several high-profile entrants. While Duquense Capital Management is no longer on the list—or managing money, following founder Stanley Druckenmiller's decision to close the fund—its successor fund, PointState Capital, is with $5 billion. Two funds headed by Goldman Sachs veterans, Knighthead Capital Management and Soroban Capital Partners, combined to raise $4.4 billion in the first quarter.

"Many managers are having a tough time posting substantial returns this year," AR managing editor Amanda Cantrell said. "The fact that investors are allocating more money to hedge funds indicates a real recovery of confidence in the industry."

New York remains the world's—and America's—hedge fund capital by a wide margin. The city's billion-dollar hedge funds manage almost 60% of the Billion Dollar Club's assets, and nearly 40% of global assets.

AR's Billion Dollar Club: The Top 10

rank firm assets
1 Bridgewater Associates $70.3 billion
2 JPMorgan Chase $55.2 billion
3 Paulson & Co. $35.2 billion
4 BlackRock $29.6 billion
5 Och-Ziff Capital Management $29.3 billion
6 Soros Fund Management $25.5 billion
7 Baupost Group $24.0 billion
8 Angelo Gordon & Co. $22.2 billion
9 Farallon Capital Management $20.0 billion
9 Renaissance Technologies $20.0 billion

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