SAC, Citadel Tops In Hedge Fund Returns

Jan 16 2007 | 10:47am ET

November rumors of its demise greatly exaggerated, Chicago-based Citadel Investment Group actually posted some of the best returns for a hedge fund in 2006, which was itself hedge funds’ best year in three.

Citadel was up more than 30% in a year that the average hedge fund trailed the Standard & Poor’s 500 and returned about 12%, Bloomberg News reports, citing data from Hedge Fund Research. In November, the departure of global stock trading chief Anand Parekh was at the center of rumors that Citadel was on the brink of collapse. Instead, the fund profited from the collapse of another hedge fund, Amaranth Advisors, by picking up its natural gas positions.

Steve Cohen’s investments—besides those in slightly-abused Picassos—also paid off big, as his SAC Capital Advisors returned 34% on the year. Other top performers included Atticus Capital’s flagship Atticus Global Fund, up 35%, JPMorgan’s Highbridge Capital Management, up 24.7%, and Harbinger Capital Partners, up 22%.

And where there are winners, there are losers, none more surprising than the heretofore unspeakably successful Global Alpha Fund from Goldman Sachs. The one-time “Cadillac of hedge funds,” which returned almost 40% in 2005, was down 6% this year, Bloomberg reports. Another high-profile loser was Spain’s Vega Asset Management, whose Select Opportunities Fund dropped 15.3% last year.


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