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Fund Watch

The billion-dollar fund managers that beat Ray Dalio in 2019

Ray Dalio’s Bridgewater Associates — the world’s largest hedge fund with more than $160bn in assets under management — struggled to beat market returns in 2019 on a number of funds while the industry recorded its best annual performance in a decade, according to the Financial Times.

Although Bridgewater Associates’ All Weather strategy gained 17%, according to Institutional Investor, its flagship, the Pure Alpha fund, barely gained last year. As of 23 August had it reportedly lost 6%, data from Bloomberg indicated. In 2018 the fund posted gains of 14.6%. The publication also highlighted that in 2019 the Pure Alpha II suffered its first annual loss since 2000.

17%

Bridgewater Associates’ All Weather strategy gains in 2019

  

Meanwhile, Bridgewater Associates’ more leveraged version, Pure Alpha 18 Percent, posted a 0.5% fall in 2019 while the Pure Alpha 12 Percent ended the year up 0.5%.

There were a number of hedge fund managers that performed exceedingly well in 2018. Here are the top five managers, named by Bloomberg, who earned themselves more than a billion dollars last year:

 

Chris Hohn’s TCI Fund Management

The hedge fund manager who took home the biggest pay packet last year was the founder of TCI Fund Management. The fund’s 13F filing showed that it held 17 stock positions at the end of the fourth quarter. The fund gained 41% in 2019, making more than $1.85bn for founder and manager Chris Hohn, Bloomberg shows.

Hohn, who founded TCI Fund Management in 2003, is known for his activist investment style. In 2019, the London-based activist investor benefited from holding generally long equities, with large positions in the likes of Moody’s [MCO], Microsoft [MSFT] and Charter Communications [CHTR] propping up returns, Forbes notes.

41%

TCI Fund Management gains in 2019

  

Jim Simons’ Renaissance Technologies

Renowned quantitative trader Jim Simons may have retired from his firm Renaissance Technologies almost a decade ago, but his ownership stake made him an annual income of $1.7bn in 2019.

While the firm has never fully divulged the returns of its flagship Medallion Funds, it has reportedly averaged close to 66% in annual returns before fees between 1988 and 2018, according to research from The Wall Street Journal.

According to the secretive firm’s most recent 13F filing and analysis from Fintel, it had 3,469 long positions by the end of the fourth quarter. Most notably, it added 3.9 million shares of Tesla [TSLA] to its portfolio, making it well-positioned to benefit from the electric carmaker’s 119% climb from the start of the year to its most recent all-time high on 19 February.

 

Ken Griffin’s Citadel

The $30bn Citadel fund founded Ken Griffin in 1990. The fund reportedly returned 19.4% in 2019 accumulating $1.5bn for the billionaire manager, according to data by Bloomberg. A fourth-quarter 13F filing and Fintel analysis showed Citadel held more than 11,200 positions, including in stocks such as AbbVie [ABBV], Apple [APPL] and Zoom Technologies [ZOOM].

19.4%

Citadel fund's returns in 2019

  

Citadel’s Wellington fund gained across all five of the firm’s strategies, including its quantitative Tactical Trading fund — a separate multi-strategy fund — that rose 20% in 2019, figures from Bloomberg’s Hedge Fund Indices indicate. The hedge fund returned $6bn in profits to its investors last year.

 

Steve Cohen’s Point72 Asset Management

With a reputation as one of the most powerful men on Wall Street, Steve Cohen has had a long career in hedge fund management.

Point72 Asset Management, founded in 2014, returned 14.9% net of fees in 2019 and made $1.3m for Cohen, Institutional Investor reports. The publication described Cohen’s highly diversified equity portfolio in which no individual holding accounts for more than 1% or 2% of the portfolio’s total.

One of his former employees also performed well. Cohen’s protégé Gabriel Plotkin’s fund Melvin Capital Management — which Cohen reportedly has $1bn invested in —popped 44% in the first half of 2019, according to Bloomberg.

 

Chase Coleman’s Tiger Global Management

Chase Coleman has come a long way since his start an analyst at now-retired Julian Robertson’s Tiger Management. Robertson shut down the firm in 2000 before reportedly handing Coleman a $25m to start Tiger Global Management — arguably now one of his best investments.

In 2019, Tiger Global Management’s main fund gained 33%, giving Coleman a net income of $1.1bn, Bloomberg reports. The fund had a total of 73 positions by the end of the year including a number of tech stocks such as Amazon [AMZN], Alphabet [GOOGL], Netflix [NFLX], PayPal [PYPL], and Slack [WORK], its most recent 13F filing shows.

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Past performance is not a reliable indicator of future results.

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