SOURCE: AR Magazine

AR Magazine

October 03, 2011 08:00 ET

Combined Assets of Billion-Dollar Hedge Funds Reach $1.4 Trillion, AR Magazine Survey Finds

New Investor Allocations Account for Majority of Growth on Soft Industry Performance

NEW YORK, NY--(Marketwire - Oct 3, 2011) - American hedge funds reported a healthy increase in assets in this year's first half and now manage a combined $1.399 trillion. That's $102 billion, or nearly 8%, more than they managed at the beginning of the year, according to the latest Billion Dollar Club, AR Magazine's survey of American hedge funds managing $1 billion or more.

Bridgewater took the top spot again, followed by J.P. Morgan Asset Management and Paulson & Co.

Globally, hedge fund assets amount to $2.16 trillion, up slightly from the $1.82 trillion managed at the beginning of the year.

Full results are available online at

As of July 1, there were 241 American hedge fund firms managing assets of $1 billion or more, according to the survey, which appears in the October issue of AR. That's an increase since January 2011, when there were 225 such funds holding a combined total of $1.297 trillion, according to the survey.

While hedge fund assets have been slowly recovering, the industry remains down nearly 20% from its market peak in July 2008, when the biggest 268 American firms managed $1.675 trillion.

The industry's growth comes at a time when overall hedge fund performance has been lackluster, indicating that most of the increase is due to new inflows from investors. Through the end of June, the AR Composite Index had gained 1.79% and stood at 0.42% at the end of August.

"Many managers are having a tough time posting substantial returns this year," said Amanda Cantrell, managing editor of AR. "The fact that investors are allocating more money to hedge funds indicates a real recovery of confidence in the industry."

Several big-name hedge fund managers decided to return external capital in the first half, but those resulting industry losses were in part offset by several sizeable new launches and the increasingly fast-paced growth at some spin-outs, including PointState Capital, which has raised $5 billion; Soroban Capital Partners, which has raised $2.1 billion, and Knighthead Capital Management, with $2.3 billion under management.

Bridgewater Associates emerges as this year's biggest winner. With $70.3 billion as of July 1, Bridgewater not only remains the largest American hedge fund firm but also notched the biggest gain in assets, adding $11.4 billion -- or 19.35% -- since January. The rapid growth of Bridgewater's new Pure Alpha Major Markets Fund, which the firm launched last year as a way to cap its original Pure Alpha fund, accounted for much of these gains.

The number two spot goes to J.P. Morgan Asset Management, which had $55.2 billion as of July 1, a jump of more than 21% from the beginning of the year. Most of that growth is attributed to inflows into J.P. Morgan's hedge fund business, although its Highbridge Capital Management unit also gained $2 billion during that period.

Paulson & Co. takes the third spot with $35.2 billion, $800 million less than in January 2011.

American hedge funds control the bulk of industry assets worldwide. By far, New York remains the central hub, accounting for $837.83 billion of assets managed by the Billion Dollar Club.

Firm AUM ($ billions)
Bridgewater Associates 70.3
J.P. Morgan 55.2
Paulson & Co. 35.2
BlackRock 29.62
Och-Ziff Capital Management Group 29.3
Soros Fund Management 25.5
Baupost Group 24.0
Angelo, Gordon, & Co. 22.21
Renaissance Technologies 20.0
Farallon Capital Management 20.0
Source: AR magazine

About AR
AR magazine, and its online offering at, is a thought leader for the hedge fund industry, delivering the most insightful, entertaining and authoritative published content about hedge funds online and in print. AR is a publication of Institutional Investor and HedgeFund Intelligence, divisions of Euromoney Institutional Investor, the international publishing and information company. See for more information.

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    Melissa Mandel Kvitko
    Rubenstein Associates