by As stock markets soared in 2023, so did the fortunes of many of the world’s largest hedge funds.
The 20 best-performing hedge funds made $67 billion in profits last year, triple what they reported in 2022, according to data released by LCH Investments, a so-called fund of funds that ranks the top 20 companies based on lifetime earnings, after fees. .
The strong performance by elite financiers follows the rally that stock markets have enjoyed over the past year. The S&P 500, Wall Street’s most closely watched benchmark, hit a record high last week.
That has benefited hedge funds, especially those that make focused bets on individual stocks. Many in the industry have invested a lot in the “magnificent seven” tech stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla), although some on Wall Street are increasingly concerned that too many investors are betting on the same companies.
In some ways, the data reflects the growing divide between the industry’s major players and everyone else. The top 20 firms oversee just under 19 percent of the industry’s $3.5 trillion in assets under management, but account for 46 percent of the sector’s total lifetime earnings.
At the top of the 2023 results list was TCI, an activist hedge fund run by financier Christopher Hohn, which posted net profits of $12.9 billion. Other top performers last year included Citadel, DE Shaw, Millennium and Elliot Management.
Large companies that reported losses last year included Bridgewater Associates, the firm founded by outspoken billionaire Ray Dalio, and Caxton Associates.
Pershing Square Capital Management, the firm run by William A. Ackman, perhaps best known recently for calling for the resignations of the presidents of MIT, Harvard and the University of Pennsylvania, returned to the top 20 for lifetime profitability in the latest ranking. over concerns about his handling of anti-Semitic acts on campus.
