Billion-Dollar Fund Assets Up 6% In First Half

Sep 6 2012 | 12:42pm ET

The old cliché about the rich getting richer has become very nearly a scientific law in the hedge fund industry.

The biggest hedge funds in America got bigger during the first half, as hedge funds with at least $1 billion in assets added to their total. All told, the 268 members of the group—making AR magazine's billion-dollar club as numerous as it has even been; in both of the last two bi-annual surveys, the club numbered just 241—manage $1.42 trillion, 1.43% more than a year ago and 6% more than six months ago. And growth was concentrated in the biggest among them, with the largest 50 firms growing at a 3.17% clip, compared to just 1.52% for the rest.

And the top ten—headlined for the ninth straight time by Bridgewater Associates—control 21.4% of the club's total assets. Bridgewater itself accounts for more than 5% of the $1.42 trillion, with assets of $77.2 billion, up from $76.6 billion at the end of last year.

Way back in second place is JPMorgan Asset Management, including Highbridge Capital Management, whose assets shrunk by 1.8% to $43.2 billion. Och-Ziff Capital Management was third with $29.3 million and Baupost Group fourth with $25 billion, pushing aside BlackRock, whose assets dropped 1.36% to $24.15 billion.

With the top ranks fairly static, the most explosive growth came from the second tier. D.E. Shaw Group's assets soared 14.1% to $19.4 billion, nearly cracking the top 10, while Mariner Investment Group saw a 2.52% increase to $10 billion. Viking Global Investors' assets rose by 2.13% to 15.6%, top-tenner Angelo Gordon's by 2.12% to $23.35 billion and Tiger Global Management's by 2.01% to $8.01 billion.

On the other side of the ledger, Neuberger Berman Group's hedge fund assets plummeted by almost three-quarters, from $3.99 billion to just $1.08 billion, on the verge of an unceremonious exit from the billion-dollar club. Paulson & Co., a member of the top 10, if barely, continued to shrink, as well, from $22.6 billion to $21 billion, while Lazard Asset Management dropped from $5.5 billion to $4.3 billion.

And some firms were booted from the club entirely. Centaurus Capital left of its own volition, with founder John Arnold's retirement. Woodbine Capital's assets dropped from more than $3 billion to about $500 million, while Artis Capital Management dropped from $1.77 billion to $506 million. In their places come new launches Czech Asset Management, Dialectic Capital Management, Falcon Edge Capital and Serengeti Asset Management.

And the world's hedge fund capital remains the place to do business for Western Hemisphere hedge funds: New York is home to firms managing 57% of the billion-dollar club's capital. Nearby Connecticut remains the industry's second choice, with $187.8 billion in assets to the Empire State's $808.3 billion, followed by Massachusetts with $118.1 billion, California with $110 billion, Illinois with $33.5 billion and New Jersey with $30.8 billion. Texan club members managed $25.8 billion and Minnesotan members $23.1 billion, followed by those based in Brazil, with a combined $20.5 billion. Only $43 billion of club assets are managed somewhere other than the aforementioned states, countries and Florida.

For complete report, see AR Magazine (subscription only)


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