19 Oct 2022
US Billion Dollar Club battered by H1 market storm
The Americas Billion Dollar Club (BDC) of leading hedge fund firms stood at 312 firms at the end of the first half with $2.16tn in hedge assets. A net increase of 14 firms was driven by the addition of 30 firms newly considered in the survey as running hedge fund assets, which added around $103bn to the total.
Excluding these firms, the latest BDC managed $109bn fewer assets than the BDC at the start of the year, a drop of 5%. Most of the H1 asset decline came among the biggest $10bn+ firms, some $75bn, with the $5bn-$10bn and $3bn-$5bn brackets both declining by $19bn and $13bn, respectively. Assets managed by the smallest BDC firms held steady.
Hedge funds have this year faced the most turbulent market conditions since the financial crisis driven by a combination of Russia’s invasion of Ukraine, rising inflation, interest rate hikes and recessionary fears.
North American-focused hedge funds were down 7.9% over the first half, With Intelligence data shows, although they fared better than the S&P 500 which was down 21%, and the Nasdaq, which lost almost 30%. The broad-based Eurekahedge Hedge Fund Index was down 5.5% over the first half, while long/short equity hedge funds slumped 9.9%.
Mid-year asset figures were unavailable for a raft of managers heavily hit by the plunge in tech and other stocks, suggesting the asset decline of the BDC could be much deeper.
Bridgewater Associates retained its number one ranking, increasing hedge fund assets by almost one quarter to $126bn in a standout year for its Pure Alpha macro strategy. Pure alpha surged 32% in the first half in its higher volatility sleeve, according to With intelligence data.
DE Shaw wrested second spot from quant rival Renaissance Technology with both firms seeing a slight reduction in hedge assets. Paul Singer’s Elliott Management jumped over BlackRock into fourth place, adding $4.2bn in hedge fund AuM as the asset management giant’s hedge AuM declined by a similar amount to slide into fifth.
Citadel, which has set the pace among multi-manager shops this year, added $8.6bn to its hedge assets over the first half to climb into eighth place in the ranking.
Macro and CTA strategies have proven to be some of the best-performing hedge fund strategies this year.
And huge first-half returns of more 170% propelled Said Haider’s firm up rankings, doubling its assets to $3.6bn at mid-year.
Quant shops AQR Capital Management and AlphaSimplex Group managed to grow their hedge funds by 81% and 54%, respectively. AQR added nearly $20bn, the second largest dollar growth behind Bridgewater.
While tempestuous markets have rewarded some managers, equity-focused funds lost out. Among the worst casualties, record losses among Steve Mandel’s Lone Pine Capital’s hedge funds saw them shrink by 47%, or $5bn, while D1 Capital shed $6.5bn, representing around one-quarter of its assets.
Among the BDC, just over $2.1tn of assets were managed by US firms. Brazil accounted for $62bn of the assets, and $17bn was managed by Canada-based firms.
In total, 35 firms joined the latest BDC, including 30 firms with assets that have been newly classified as hedge fund in the expanded With Intelligence database. These included some alternative mutual funds, credit hedge funds, and non-US investment firms.
Some 21 firms dropped out of the ranking, including some notable participants. Gabe Plotkin’s once $7.8bn Melvin Capital Management liquidated assets after heavy performance losses and outraging investors over reorganization and fee proposals. Columbus Hill Capital Management sunk below the $1bn threshold mark, while Ben Melkman announced he was shutting his Light Sky Macro after years of lackluster returns. Anchorage Capital Group was omitted from the ranking as it winds down its previously $7.4bn credit fund, Anchorage Capital Partners.
Want to know more?
Speak with one of the team to find out how our intel can help you.