Citadel’s $16 Billion Gain In 2022 Makes Ken Griffin’s Firm The Top-Earning Hedge Fund Ever

Ken Griffin is the new hedge fund champion, according to LCH Investments’ annual ranking of the world’s top 20 hedge fund managers, with his Miami-based Citadel generating $16 billion in profits for investors last year. Since then, net income is estimated at $65.9 billion. Founded in 1990.

Despite Bridgewater’s 2022 net profit of an estimated $6.2 billion, Citadel overtook Ray Dalio’s Bridgewater to top the all-time list. After posting the largest single-year profit of any hedge fund on record, the company estimates it ended 2022 with $62.3 billion in assets under management.

“Even beyond that [John] Rick Sopher, Chairman of LCH Investments and CEO of Edmond de Rothschild Capital Holdings, said in a press release: “Their ranking climb over the past few years has been remarkable.”

LCH Investments is the world’s oldest hedge fund, with an annual return of 9.9% since its inception in 1969. This is because many hedge funds with outstanding returns enjoy their best performance with fewer assets before capitalizing on their track record to raise more money. Sopher began tracking which managers generated the most raw cash for their investors. George Soros’ fund topped his first list in 2010, and Dalio held the top spot for seven years after that, until Griffin replaced him this year.

A stellar year for Citadel’s flagship fund follows decades of strong performance with a 26% return in 2021. His $1 million invested in Wellington at its inception in 1990 is worth $328 million today compared to $23 million he would have had if invested in the S&P 500 index. Citadel’s Fixed Income, Tactical Trading and Equity Funds have all produced returns in excess of his 21% in 2022. The company returned his $7 billion profit to investors earlier this year, according to The Wall Street Journal. all four funds. Citadel issues billions of dollars annually from its market-making business, Citadel Securities. forbes Griffin’s net worth is estimated to have doubled over the past two years to reach $32 billion.

Citadel declined to comment on its investment strategy, but Griffin predicted: forbes Last year, he said high inflation would force central banks around the world to tighten interest rates aggressively, and expressed concern about how sanctions against Russia would affect how the world views the dollar.

Macro hedge funds trading based on such international economic issues shined brightly in 2022. The HFRI 500 Macro Index, which tracks such funds, rose 14.2% last year, with DE Shaw and Israel England’s Millennium Management multi-strategy funds returning 24.7% and 12.4%, respectively. , Respectively. LCH estimates that DE Shaw made his $8.2 billion profit for investors and Millennium made his $8 billion.

Caxton Associates, a London-based macro hedge fund with $12.9 billion in assets, is new to the list after making an estimated $2.1 billion in profits last year and $19.8 billion since inception, according to LCH’s report. Bruce Covner founded Caxton in 1983 and Andrew Law became CEO in 2012.

Below is LCH’s complete list of the top 20 hedge fund managers ranked by net income since inception.

Equity-holding net-long funds like Lone Pine and TCI are off the list, while Chase Coleman’s Tiger Global, which was on the list last year, dropped after posting $25 billion in net income since inception. The Financial Times reported in May last year that Tiger Global had already lost $17 billion this year, ending the year down 56%, so its losses have deepened slightly from there.

“Equity long/short managers, especially those who were net long and had a growth bias, generally performed poorly, some even worse than the market index,” says Sopher.

Daniel Loeb’s Third Point is also off the list as its main fund fell 21.8%, and Lewis Bacon’s Moore Capital is now closed to outside investors, with past gains frozen by LCH.

The HFRI Equity Hedged Index, which tracks equity-focused funds, fell 12.7% last year, while the fund-weighted composite index, which tracks the hedge fund industry broadly, fell 3.4%. The LCH report cites data from research firm eVestment that hedge funds overall lost $208 billion last year, reaching $3.3 trillion in assets under management.

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