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top 10 hedge funds in the world

Hedge funds are investments using various strategies, including short-selling, leveraged derivatives, and other speculative strategy to generate a return greater than the market. These funds are invested in both global and domestic markets in the same way. They generally have minimum investment requirements of $1 million and are geared towards high-net-worth people pension funds and institutions.

Ultimately, hedge funds are always more risky than other investment options. The same rules, like mutual funds, do not govern them and could not have to submit reports to the U.S. Securities and Exchange Commission (SEC).

This is our review of the top 10 hedge fund companies with the highest market share, as their total AUM (AUM) on June 20, 2021.

What is the reason why it is called a hedge fund?

The term “hedge fund” is derived from how they are created to lower the business risk and benefit from an unstable market.

The hedge funds use various strategies to protect high-risk investors from significant losses.
significanceA hedge fund managers may engage in investment strategies such as using bonds and stocks or betting against considered undervalued firms.

AQR Capital Management

AQR Capital Management was founded by Cliff Asness, David Kabiller, John Liew, and Robert Krail, all of whom are regarded as highly knowledgeable specialists in the field of the financial market. It has been operating since 1998 and caters to clients from financial advisers, institutional investors, and wealthy people from its headquarters located in Greenwich, Connecticut.

Over $100 billion of assets are managed by the hedge fund. It may be around for a few decades but has grown into massive proportions. Its total assets under management are much higher.

AQR is a fund manager that invests through a range of methods, including traditional securities and derivatives. Like other hedge fund management firms, this firm is famous for taking a quantitative investing method that requires precise mathematical calculations and data analysis.

Bridgewater Associates – Ray Dalio

Bridgewater Associates was founded in 1975 by Ray Dalio, one of the most popular hedge fund managers. He is known not solely for his long-standing return record and investment perspective but also for his vision of organizational management and the work culture for maximizing performance.

Bridgewater is a fund that has its headquarters in Connecticut. It gained prominence during times of turmoil in the market, in which the portfolio risk reduction strategies helped it navigate times of extreme market fluctuations.

Dalio describes Bridgewater’s investment strategy as a “global macro-fund” where the principal goal of the portfolio is to produce non-correlated returns.

Bridgewater is regarded as an early pioneer of risk-parity investment and portfolio building, in which the investment portfolio cancan perform in various economic environments.

Bridgewater Associates

Bridgewater Associates is based in Westport, Connecticut. The company was established in the year 1975 in 1975 by Ray Dalio and is currently controlled by the former president. It has more than $140 billion of AUM.

This firm makes use of the latest technology in its investment procedure. It includes actions like studies and validations to aid initiatives’ development.

Citadel LLC

Managed by billionaire Ken Griffin, Citadel’s investment strategies are based on five categories: fixed income, equity and macro, commodities convertibles and credit, and globally-based quantitative strategy. The most distinctive feature of Citadel is its focus on managing risk as a key discipline. It has a separate “risk management center” that conducts stress tests to assess the effect of transactions on Citadel’s portfolios. In 2022, the Citadel’s flagship Wellington fund increased by 38% during an economic downturn, registering the most desirable year ever.

The Wellington fund reportedly continued its performance by posting a 7.2 percent get during the first quarter of 2024. It has outperformed the overall industry of hedge funds, up 4.4 percent from the beginning of the year up to July 12, and is compatible with the Barclay Hedge Fund Index.

Man Group

Man Group was founded by James Man in 1783. Man Group offers a full assortment of investment services specifically tailored to the needs of institutional investors and wealth management.

The business’s procedures are based on data-driven, quantitative processes. The company’s AUM is $142 billion.

Kenneth Griffin: The Game Master Kenneth Griffin

Certain users believed that a company named GameStop — a brick-and-mortar video game retailer could be worth investing in. The hedge fund industry was convinced that GameStop was inevitably doomed because it’s physically based. Therefore, they began shorting the share price, selling shares they’d borrowed in the hope that they’d purchase them for a lower price and make money from the difference.

However, this was different. The trading activity of r/WallStreetBets’ users continued to push up the price of shares until it reached a record of $483 per share. The result was a short squeeze. Hedge funds needed to place their money in their pockets and take the shares they’d previously shorted substantially more than the price they bought them for. This resulted in them having to begin hemorrhaging cash.

In the end, Robin Hood was the primary place for trading and the only platform that allowed GameStop shares and the craziness ended.

Entrance into the World of Billions

Though fees within the industry of wealth management have come under declining pressure over the decades, the incomes of the desirable firms remain largely unchanged. The traditional fee structure that hedge fund companies use is the two and twenty model, which is 2% of the total assets managed (AUM) and 20percent of the profits based on their performance.

It’s an impressive sum when you consider that the AUM of hedge funds is higher than $100 billion, as Ray Dalio’s Bridgewater Associates. Huge fees imposed on the excessive value of assets are one of the reasons these managers made it to the Forbes 400. Forbes 400 list.

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