Thursday, May 7, 2009

Hedge Fund Performance in 2008

Assets of the largest hedge funds in the Americas, those managing
$1 billion or more, decreased by 32.3% in the second half of 2008.

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These hedge funds now manage combined assets worth $1.134 trillion, a decline of $541 billion compared to last July.

Absolute Return’s Billion Dollar Club now includes 218 firms, each managing more than $1 billion, which is a decrease of 18.66% compared to the number of firms in July.

Most of these firms suffered drops in asset values resulting from investor redemptions and poor performance.

The number of hedge funds managing $10 billion or more has declined drastically. Around 31 large hedge funds managed assets of $512 billion as of January 1, 2009, compared to 47 firms managing $857 billion last July.

However, even though overall hedge fund assets have declined,assets are still concentrated among the largest hedge funds.

The top ten firms by size now manage $249.8 billion, which is more than 22% of all assets in the Billion Dollar Club compared to 20% of the club’s assets last July.

Bridgewater Associates and Soros Fund Management were the only two firms in the top ten to increase assets over 2008.

Bridgewater moved up to first place, with $38.6 billion under management whilst JPMorgan (including JPMorgan Asset Management and Highbridge Capital Management) dropped to second place, with $32.90 billion under management. Paulson & Co., moved up to third place, with $29 billion under management.

D. E. Shaw Group swapped places with Paulson to place fourth with $28.6 billion under management. Och-Ziff Capital Management remained in fifth place with $22.10 billion under management.

The biggest winner of 2008 was Baupost Group, which now manages $16.8 billion, an increase of $5.5 billion from last January (and a 48.67% growth in assets).

The biggest loser of 2008 in terms of dollars lost was Farallon Capital Management, which fell to eighth place from third as assets dropped 44.44% in 2008 to leave the firm with $20 billion at present, down $16 billion from last January.

A shocking 89% of firms declined in size over the second half of 2008 and 73%
declined in size over the past year.

New York remains the state with the greatest number of Billion Dollar Club members, as it is home to 121 firms managing combined assets of $680 billion. Connecticut is second largest, home to 29 firms managing a combined total of $149 billion worth of assets. California is third with 25 hedge funds in the state managing $96 billion.


Firm Assets Under Management ($ billions)

Bridgewater Associates $38.60
JPMorgan $32.90
Paulson & Co. $29.00
D. E. Shaw Group $28.60
Och-Ziff Capital Management $22.10
Soros Fund Management $21.00
Goldman Sachs Asset Management $20.60*
Farallon Capital Management $20.00
Renaissance Technologies $20.00
Barclays Global Investors $17.00*

Source: Absolute Return
Unless noted otherwise, all asset figures are as of January 1, 2009.
* as of December 31
** the full Billion Dollar Club appears in Absolute Return’s March issue.

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