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
||Paulson & Co.
||Och-Ziff Capital Management
||Soros Fund Management
||Angelo Gordon & Co.
||Farallon Capital Management