Hedge Funds - US 50 - The HFJ

US5OThe 50 largest US managers

2

IN ASSOCIATION WITHUS50

elcome to the third edition of The Hedge Fund Journal’s US50 published in association with Newedge Prime

Brokerage Group. Much like its European equivalent, the Europe50, the US50 is a listing of the 50 largest US single hedge fund managers ranked by assets under management at 31 December 2011.

Since the second edition of the US50 was published in March 2010 the hedge fund industry has recovered further in terms of assets under management, returning to just over the $2 trillion level, according to data from Hedge Fund Research. The third edition of the US50 comes after a period of initially strong investment performance followed by a more volatile market environment, punctuated by brief periods of gains and sudden investment losses.

Many of the US50 from two years ago are still present in the third edition, although the relative ranking of many has certainly changed. On a comparative basis, most hedge fund firms have gained assets over the past two years though there are a number that have shrunk notably. Sometimes this is due to investors withdrawing cash after a period of fund drawdowns, other times it is because a particular strategy may have fallen out of favour. Conversely, the attractions of a strategy can certainly help to attract investors.

Macro attracts investorsThis is clearly the case with global macro and the rise of Bridgewater Associates to pole position in the US50 and indeed the global hedge fund sector. Founded by Ray Dalio in 1975, Bridgewater rose to the number one position in our 2012 survey: it now manages $76.1 billion in hedge fund assets (plus a further $45 billion in non-hedge strategies). That marks a stunning 69% rise in assets from 31 January 2010.

The rise of Bridgewater and its reputation for being a firm with a unique culture of excellence coincides with the continued burst of allocations to macro strategies. This has also happened in Europe where macro specialist Brevan Howard Asset Management is near the top of the leader board with $33 billion in AUM.

“Macro strategies continue to be popular with investors,” says Robert Kaplan, chief investment officer of Permal Asset Management. “You have to have a global perspective with an appreciation of economic and political factors. It is a strategy that continues to attract most of the assets. We are in a period of lower volatility, but between events on the calendar. There are events that will cause investors to have jitters. In the fourth quarter the US election. Post-election, the end of the Bush tax cuts. And in the meantime there will be ongoing

news from Europe on refinancing. Investors are cognisant of all the macro factors playing on markets, so they are allocating more to macro strategies than to all the others.”

The surge of investors embracing macro managers was more than enough for Bridgewater to dethrone J.P. Morgan Asset Management, the leader in the previous US50. This time JPMAM had $45 billion in AUM, down from $54 billion in the 2010 survey. Coming in third and fourth place respectively were Och-Ziff Capital Management and BlackRock. Och-Ziff moves up to third place from fifth with a rise in assets to $29 billion, while BlackRock jumps to fourth from eighth with assets of $28 billion.

Residing at fifth place in the US50 is the venerable Soros Fund Management. It has estimated AUM of about $25 billion. With the firm recently converting to a family office and returning funds to investors, Soros FM will be disappearing from the league table of leading managers. Indeed, in early April it was confirmed that Jonathan Soros, the son of founder George Soros, now 82, is setting up a family office of his own. Changing regulations, including registration and asset position disclosures affecting hedge funds in the US, are expected to drive the evolution of new structures for the foreseeable future. Being less burdensome with respect to regulation and disclosure, the family office structure looks certain to enjoy growing appeal for both established wealth creators and investors able to allocate substantial sums of capital.

Varied strategy hedge fundsThe flow of funds to macro and commodity trading advisor strategies reflects how managers in these areas feel comfortable providing investors with active liquidity. Macro funds, in particular, have matched that liquidity with strong returns even if CTAs have found it much more difficult to find trends and harness them to generate performance. Post-2008 it is no surprise why investors continue to prefer strategies concentrated on the liquid end of markets.

Among the hedge fund firms in the top half of the US50, in particular, there are a substantial number which employ a multi-strategy approach to running money. BlackRock, for example, has expanded far beyond its roots and now offers a wide variety of strategies. Its single manager hedge funds sit within BlackRock Alternative Investors, a $100 billion-plus colossus that also includes funds of hedge funds, commodities and real estate.

“The leading hedge funds are by and large firms with a multi-strategy flavour,” says a portfolio manager with a major fund of hedge funds, who notes that these firms have lots of infrastructure

and access to plentiful liquidity. “It shows the way forward is to be a multi-strategy fund. If investors want to avoid funds of funds they can go to the big names and get a lot of options. The top hedge funds have become, shall we say, varied strategy with the name recognition that investors can feel comfortable with.”

It is not to say, however, that all firms embracing a multi-strategy investment style have performed well or grown assets. Perhaps the most notable among these firms is Paulson & Co. Though John Paulson profited mightily from the US sub-prime implosion, a raft of new funds and new strategies in existing funds have endured an extremely chequered run. The result is that Paulson’s assets fell to $22.6 billion from $32 billion in 2010, lowering its ranking to seventh from third. In a similar vein, DE Shaw Group has lost substantial ground in terms of AUM even though the firm has introduced more advantageous terms on some funds for its institutional investor client base.

AUM, fund numbers growingBut the overall picture for US hedge funds is one of growth, both in terms of the new funds being launched and the assets being allocated to managers, data from HFR shows. Indeed, there is growing anecdotal evidence that funds of hedge funds are investing more and more in smaller managers in order to bolster their value proposition to investors.

“The first thing to say about flow trends is that we see investors coming back to hedge funds,” says Stefan Keller, head of managed account platform research and external relations with Lyxor Asset Management. “The third quarter of 2011 was terrible for outflow, but the fourth quarter saw recovery and that carried on through January and February. March was stabilising but on a rising trend. Overall, the first quarter of 2012 shows a stronger continuation of what we saw begin in the fourth quarter of last year.”

Many readers will realise that the US has a stringent legal framework in terms of what information funds can and cannot provide. For this reason, many of the hedge funds contacted for this survey were anxious to avoid doing anything that could be construed as solicitation. Though a majority of firms were prepared to provide AUM data, they were more reluctant to provide information about fund names, strategies and portfolio managers. As a result, The Hedge Fund Journal has sourced this information from other sources and sought to verify it where possible.

In closing, we would like to thank Newedge Prime Brokerage Group for its continued support of this survey. THFJ

The US50 In association with Newedge Prime Brokerage Group

BILL McINTOSH

W

3


Pure Alpha strategy

Pure Alpha Major Markets strategy

All Weather 12% strategy

Ray Dalio, Bob Prince,

Greg Jensen

Global Macro Ray Dalio

Bob Prince

Greg Jensen

Founders/PrincipalsStrategy/styleFund Manager(s)Size ($b)Principal Fund(s)

1 Bridgewater Associates

$57.1 bn

$14.2 bn

$4.8 bn

AUM 31 December 11$76.1 bn

AUM 31 January 10$45.0 bn

Location Westport, CT



Location New York, NY

Not disclosed Not disclosed Relative Value

Equity Long/Short

Macro

Distressed Securities

Merger Arbitrage/Event Driven

Short Selling

Not disclosed


2 JP Morgan Asset Management

Not

disclosed


AUM 31 January 10$21.4 bn (est)


Not disclosed Not disclosed Diversified Fixed Income

European Opportunities

Credit

Emerging Europe

Natural Resources

UK Emerging Companies

UK Equity

Larry Fink


4 BlackRock

Not

disclosed

OZ Master Fund

OZ Europe Master Fund

OZ Asia Master Fund

OZ Global Special Investments Master Fund

Daniel Och Multi-Strategy Daniel Och


3 Och-Ziff Capital Management

Not

disclosed




AUM 31 December 11$25.0 bn (est)

AUM 31 January 10$27.5 billion (est)


Quantum Fund Not disclosed Global Macro George Soros


5 Soros Fund Management

Not

disclosed

4




Location Boston, MA

Not disclosed Not disclosed Equity Value Seth Klarman


6 Baupost Group

Not

disclosed




Paulson Advantage Funds

Paulson Credit Opportunities Funds

Paulson Partners Funds

Paulson Recovery Funds

Paulson Gold Fund

John Paulson Not disclosed John Paulson


7 Paulson & Co

Not

disclosed




Not disclosed Not disclosed Multi-Strategy John M. Angelo

Michael L. Gordon


8 Angelo, Gordon & Co

Not

disclosed



Location East Setauket,

NY

Renaissance Institutional Diversified Alpha

Fund

Renaissance Institutional Equities Fund

Renaissance Institutional Futures Fund

Renaissance Medallion Fund

Not disclosed Statistical Arbitrage

Long/Short Equity

Equity Market Neutral

James Simons


9 Renaissance Technologies

Not

disclosed



Location San Francisco,

CA

Not disclosed Not disclosed Credit

Merger Arbitrage

Long/Short Equity

Special Situations

Real Estate

Thomas Steyer

Andrew Spokes


10= Farallon Capital Management

Not

disclosed

5





Elliott Associates, L.P.

Elliott International, Limited

Not disclosed Multi-Strategy Paul Singer


10= Elliott Management Corp

Not

disclosed




King Street Capital, L.P.

King Street Capital, Ltd

Brian J. Higgins

O. Francis Biondi Jr.

Long/Short Credit

Event Driven

Brian J. Higgins

O. Francis Biondi Jr.


12 King Street Capital Management

$6.2 bn

$10.5 bn




Davidson Kempner European Partners Fund

Davidson Kempner Event Driven Equities Fund

Davidson Kempner Institutional Partners Fund

Davidson Kempner Distressed Opportunities

Fund

Not disclosed Event Driven

Merger Arbitrage

Long/Short

Convertible Arbitrage

Thomas Kempner

Marvin Davidson


13 Davidson Kempner Capital Management

Not

disclosed




Global Alpha

North American Equity Opportunities

Not disclosed Long/Short Equity

Macro

Not disclosed


14 Goldman Sachs Asset Management

Not

disclosed




D. E. Shaw Multi-Asset Fund

D. E. Shaw Terella Fund

D.E. Shaw Composite Fund

D.E. Shaw Heliant Fund

D.E. Shaw Oculus Fund

Not disclosed Multi-Strategy

Statistical Arbitrage

Event Driven

Macro

Fixed Income Arbitrage

David E Shaw


15= DE Shaw Group

Not

disclosed

6





Moore Emerging Market Fund

Moore Global Investors Fund

Moore Macro Managers Fund

Louis Bacon

Greg Coffey

Global Macro

Emerging Markets

Louis Bacon


15= Moore Capital

Not

disclosed

AUM 31 December 11$14.5 bn *

AUM 31 January 10Not disclosed

Location Greenwich, CT

Not disclosed

*Hedge Fund assets have been scaled to 10%

volatility

Not disclosed Not disclosed Cliff Asness

David Kabiller

John Liew


17 AQR Capital Management

Not

disclosed




Viking Global Equities Not disclosed Long/Short Equity Andreas Halvorsen

David Ott


19 Viking Global Investors

Not

disclosed




York Multi-Strategy

York Credit Opportunities

York European Opportunities

York Asian Opportunities

York Total Return

Not disclosed Event Driven James Dinan


20 York Capital Management

Not

disclosed



Location Boston, MA

Convexity Capital Offshore Not disclosed Multi-Strategy Jack Meyer


18 Convexity Capital Management

Not

disclosed

7





Millennium International / USA Not disclosed Multi-Strategy Israel Englander


21 Millennium Partners

Not

disclosed




US Distressed Strategy

Europe Distressed Strategy

Asia Distressed Strategy

Rob Symington

Richard Furst

Mark R. Harris

Distressed Marc Lasry

Sonia E. Gardner


22 Avenue Capital

$5.9 bn

$4.1 bn

$1.8 bn



Location Los Angeles,

CA

Not disclosed Not disclosed Multi-Strategy / Event Driven

(Credit Focus)

Joshua Friedman

Mitchell Julis


23 Canyon Capital Advisors

Not

disclosed




Eton Park Overseas Fund

Eton Park Offshore Fund

Eton Park Master Fund

Not disclosed Multi-Strategy Eric Mindich


24= Eton Park Capital Management

Not

disclosed



Location Short Hills, NJ

Not disclosed Distressed

Event Driven

David Tepper


24= Appaloosa Management

Not

disclosed

Appaloosa Investment I

Palomino Fund

Thoroughbred Master Fund

Thoroughbred Fund LP

8




Location Stamford, CT

International Fund Steven A Cohen Multi-Strategy

Long/Short Equity

Fixed Income Credit

Global Macro

Convertible Bonds

Emerging Markets

Steven A Cohen


24= SAC Capital Advisors

Not

disclosed



Location Boston, MA

Archipelago Partners

Bay Pond Partners

Iguazu Partners

Pagosa Partners

Placer Creek Partners

Not disclosed Multi-Strategy

Long/Short Equity

Commodities

Emerging Markets

Perry Traquina


25= Wellington Management

Not

disclosed



Location Chicago, IL

Citadel Kensington Global Strategies Fund Ltd.

Citadel Wellington LLC

Not disclosed Multi-Strategy Ken Griffin


25= Citadel LLC

Not

disclosed



Location Boston, MA

Not disclosed Not disclosed Not disclosed Jonathon Jacobson


25= Highfields Capital Management

Not

disclosed




Not disclosed Not disclosed Credit Steven Tananbaum


30 GoldenTree Asset Management

Not

disclosed

9





The Tudor BVI Global Portfolio L.P.

Tudor Tensor Portfolio Ltd. & Tensor Managed

Accounts

Paul Tudor Jones

Steve Evans

Global Macro

Quantitative Managed Futures

Paul Tudor Jones


31 Tudor Investment Corporation

$8.1 bn

$1.1 bn




Anchorage Capital Partners Funds

Anchorage Short Credit Funds

Anchorage Illiquid Opportunities Funds

Kevin Ulrich

Tony Davis

Dan Allen

Credit-Focused

Long/Short

Distressed

Special Situations

Kevin Ulrich

Tony Davis


32= Anchorage Capital Group L.L.C.

Not

disclosed



Location Dallas, TX

Maverick Fund

Maverick Levered Fund

Maverick Long Fund

Maverick Neutral Fund

Maverick Neutral Levered Fund

Lee Ainslie III Long/Short Equity Lee Ainslie III


32= Maverick Capital

Not

disclosed




ESL Partners Not disclosed Distressed Edward Lampet

William Crowley


32= ESL Investments

Not

disclosed




Pershing Square Fund

Pershing Square II

Pershing Square International

Not disclosed Not disclosed William Ackman


32= Pershing Square Capital Management

Not

disclosed

10





Caxton Global Investments

A.R.T. International Investors

Caxton HAWK (Diversified)

Wadhwani Asset Management

Andrew E. Law

Aaron Sosnick

Jeffrey Enslin

Sushil Wadhwani

Global Macro

Statistical Arbitrage

Quantitative Macro

Quantitative Macro

Bruce Kovner (retired)

Peter D'Angelo (retired)

Andrew E. Law


36 Caxton Associates LP

$7.1 bn



Location Boston, MA

Brookside Capital Partners Fund

Brookside Capital Partners Fund II

Sanakty Advisors Prospect Harbour

Absolute Return Capital Partners

Not disclosed Not disclosed William Romney

Coleman Andrews

Eric Kriss


37= Bain Capital/Brookside Capital Partners

Not

disclosed




Cerberus International

Cerberus Partners

Styx International

Styx Partners

Stephen Feinberg Distressed Stephen Feinberg

William L. Richter


39 Cerberus Capital Management

Not

disclosed



Location Boston, MA

GMO Aggressive Long/Short Strategy

GMO Emerging Currency Hedge Fund

GMO Fixed Income Hedge Fund

GMO Multi-Strategy Fund

GMO Credit Opportunities Fund

Not disclosed Long/Short

Emerging Currency

Fixed Income

Multi-Strategy

Credit

Jeremy Grantham

Richard Mayo

Eyk van Otterloo


37= Grantham, Mayo, Van Otterloo (GMO)

Not

disclosed




Not disclosed Not disclosed Not disclosed John Overdeck

David Siegel


40= Two Sigma Investments

Not

disclosed

11





Taconic Capital Partners

Taconic Capital Partners 1.5

Taconic Market Dislocation Fund II

Taconic Offshore Fund

Taconic Opportunity Fund

Not disclosed Not disclosed Kenneth Brody

Frank Brosens


42 Taconic Capital Advisors

Not

disclosed


AUM 31 January 10Not Disclosed

Location Atlanta, GA

INVESCO ABS Oppoutunity Fund

Invesco Absolute Return Fund

Invesco Large Cap Core Directional Long/Short

Fund

Invesco Small Cap Core Directional Long /

Short Fund

Invesco US Equity Market Neutral Fund

Not disclosed Not disclosed Charles Brady

Martin L. Flanagan


40= INVESCO Asset Management

Not

disclosed



Location Evanston, IL

Not disclosed Not disclosed Multi-Strategy

Event Driven

Fixed Income

Energy

Alec Litowitz

Ross Laser

David Snyderman


43 Magnetar Capital

Not

disclosed



Location Boston, MA

Adage Capital Partners Not disclosed Not disclosed Phil Gross

Robert Atchinson


45= Adage Capital Management

Not

disclosed




Not disclosed Not disclosed Event Driven Kenneth Garschina

Michael Martino


44 Mason Capital Management

Not

disclosed

12




Location Rowayton, CT

Graham K4D-15V Portfolio

Graham Discretionary-6V Portfolio

Graham Discretionary-12V Portfolio

Graham Proprietary Matrix-10V Portfolio

Not disclosed Macro Kenneth G. Tropin


48 Graham Capital Management

$3.5 bn

$680.8 m

$911.1 m

$764.6 m




Third Point Offshore Fund, Ltd

Third Point Partners L.P.

Third Point Partners Qualified L.P.

Third Point Ultra Ltd.

Daniel S. Loeb Event Driven

Equity Special Situations

Credit

Daniel S. Loeb


49= Third Point Management

$4.4 bn

$269 m

$1.2 bn

$1.1 bn




Greenlight Capital

Greenlight Capital Offshore

Greenlight Capital Qualified

Not disclosed Long/Short Equity

Distressed

David Einhorn


49= Greenlight Capital

Not

disclosed




Not disclosed Not disclosed Long/Short Equity Stephen Mandel


45= Lone Pine

Not

disclosed




Marathon Asia Fund

Marathon Credit Opportunity Fund

Marathon EM Opportunity Fund

Marathon Securitized Credit Fund

Marathon Special Opportunity Fund

Not disclosed Opportunistic Credit Bruce Richards

Louis Hanover


45= Marathon Asset Management

Not

disclosed

Hedge Funds - US 50 - The HFJ

Documents

Transcript of Hedge Funds - US 50 - The HFJ