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Hedge Funds Earned Record Profits in 2023

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Hedge funds across the globe witnessed a solid 2023, reaping profits exceeding the record levels of 2021. As per LCH Investments, a fund-of-funds firm, the top 20 hedge funds generated $67 billion of profits for investors last year, higher than the 2021 figure of $65 billion.

Notably, TipRanks also ranks hedge funds based on three parameters – their success rate for the year, average return, and statistical significance (higher number of recommendations). TipRanks’ top hedge fund managers’ ranking is dynamic and changes based on their portfolio gains/losses. As an investor, it would be helpful to learn about where hedge funds are parking their funds and try to replicate their performances to deliver attractive returns.

Top Hedge Funds Ranked by LCH

Intelligent bets on equities helped hedge fund managers profit meaningfully last year. While the interest rate hikes and geopolitical concerns dampened the stock markets in the early part of the year, tech stocks jumped to record highs in the second half as the whole artificial intelligence (AI) boom kept investor sentiment soaring.  

Leading the pack in 2023 was Christopher Anthony Hohn’s TCI Fund Management Ltd, earning $12.9 billion in profits, followed by Ken Griffin’s Citadel with $8.1 billion in profits. A Financial Times report highlighted that based on regulatory filings, TCI’s largest holdings as of September 2023 were Alphabet (GOOGL), Canadian National Railway (CNI), Visa (V), General Electric (GE), and rating agency Moody’s (MCO).

Meanwhile, the third spot belonged to Andreas Halvorsen’s Viking Global Investors LP, with a $6 billion profit earned in 2023. Interestingly, Bill Ackman’s Pershing Square regained a place among the top 20 list with a profit of $3.5 billion after leaving the list in 2015.

As per LCH, 20 hedge funds that have generated the most lucrative returns since their inception have only 19% of the assets under management (AUM) but earned 33% of the total profits last year. The top 20 are designated based on the cumulative dollar profits earned since inception, net of fees.

Coming to the top 20 hedge funds since inception, Citadel maintained the number one position with $74 billion in net gains, followed by D.E. Shaw and Millenium, with profits worth $56.1 billion each. Remarkably, the top 20 hedge funds have generated profits worth $755.4 billion since their inception.

TipRanks’ Top 3 Hedge Fund Managers

TipRanks has a unique proprietary method for rating hedge fund managers. A hedge fund’s performance is dependent on the hedge fund manager’s stock-picking prowess and investments. Hence, TipRanks rates managers based on their portfolio gain, Sharpe ratio, and average returns earned in the period.

Investors can leverage the TipRanks Hedge Fund Managers page to discover and learn about hedge fund managers, their investments, and their performances. Let’s look at the top three hedge funds as of today, based on TipRanks’ Star Ranking System:

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