Hedge Fund Resource

Hedge Fund Profile Resource

The article below is currently being reformatted. For similar resources please see these links:

Name Manager Main
Location(s)
Strategy Funds under
management
as of Jan 1
2007
Flagship
performance,
2006 %
Why it is in the list
US FUNDS
Angelo Gordon John Angelo
and Michael
Gordon
New York,
London
Distressed,
convertible arb,
and merger arb
$11bn Founded in 1998 by John Angelo, former head of arbitrage at LF Rothschild and Michael Gordon, former
head of research at LF Rothschild, Angelo Gordon focuses on identifying arbitrage opportunities through a
rigorous research based approach. Recently became another of the growing band of hedge funds and private
equity fi rms seeking to take advantage of turmoil in the US subprime mortgage market by investing in mortgage
servicing company Ocwen Financial.
Appaloosa
Management
David Tepper
and Jack
Walton
Chatham, New
Jersey
Distressed $4bn 25% Founder David Tepper is one of the top 50 richest men in America with a fortune estimated around $2bn.
Recently attracted interest for its large ownership position in Delphi, the bankrupt car parts supplier, and its
clashes on whether management has the shareholders best interests in mind or those of GM and the UAW.
AQR Capital Clifford Asness Greenwich,
Conn.
Value and
momentum,
fundamentally
driven
$35bn Takes a systematic, computer-assisted approach to investment involving both value and momentum factors
applied to various asset classes. View themselves as fundamental rather than quantitative as they like to
‘understand the story’ behind their models rather than reply solely on data. Currently considering an IPO.
Atticus Capital Timothy
Barakett, David
Slager
New York Event-driven $14bn European:
44%; Global:
36%
Atticus is a reluctant activist, but when it moves - as with Deutsche Börse, where it worked in parallel with
TCI, or more recently Dodge Phelps - it is effective. The fi rm has connections everywhere thanks to the
presence of Nat Rothschild, scion of the banking dynasty, as co-chairman, helping it rapidly become one of
the biggest in the business. Rarely for a hedge fund the growth also seems to have helped, rather than hindered,
returns, although it remains a highly volatile fund thanks to a relatively concentrated portfolio which
often includes big stakes in companies. Although it is event-driven, it focuses on a handful of themes, such
as metals, exchanges and railways, where it has strong views, then looks for corporate triggers. A new fund
focused on speciality fi nance, one of its big themes, has just been launched.
Avenue Capital Marc Lasry and
Sonia Gardner
New York Distressed $13.3bn Avenue event
driven: -7.5%,
Avenue Europe:
15.9%
Brother and sister team, Lasry and Gardner have built their careers on the belief that bad news is good news.
Last year, Morgan Stanley paid $300m for a stake of between 15 and 20 per cent in the fi rm as part of Morgan
Stanley chief executive John Mack’s drive to build up the bank’s presence in the hedge fund business.
Bessent Capital Scott Bessent New York Long short equity,
currencies
and commodities
$1bn One of the few openly gay hedge fund managers, Mr Bessent actively supports such organisations as Empire
State Pride Agenda, New York’s gay political lobbying organisation. Mr Bessent was one of the longest-running
members of one of the most successful hedge fund groups of all time, Soros Asset Management. As a
student at Yale he planned to be a journalist but then took an internship with celebrated commodities money
manager Jim Rogers.
Blackstone
(Kailix Advisors)
J Tomlinson
Hill, Bruce Amlicke,
Halbert
Lindquist
New York Distressed,
directional equity
and relative
value
Hedged: $2bn
Total: $78.7bn
8.86% Blackstone has about $2bn in hedge funds, primarily in distressed, directional equity and also in relative
value trading. It also has a signifi cant fund of funds business through BAAM, but is best known for its huge
private equity operation. The valuation of Blackstone in its forthcoming IPO could provide a blueprint for the
private equity and hedge fund business, and is likely to make it the largest listed alternative fund manager.
Blue Ridge
Capital
John Griffi n New York Long short
equity
$3.8bn The former right hand man of Julian Robertson at Tiger also fi nds time to be an adjunct professor of fi nance
at the Columbia Business School, where he teaches a Seminar in Advanced Investment Research.
BlueMountain Andrew Feldstein,
Stephen
Siderow and
Gery Sampere
New York and
London
Relative value
credit
$3.2bn 2.86% in Jan
(full yr 2006
not available)
BlueMountain has rapidly become a major trader in the growing credit derivative markets since starting up in
late 2003.
BP Capital
Management
T Boone Pickens
Dallas, Texas Energy focused $2.5bn 98% Mr Pickens ranks in the top 400 richest people in the world, according to Forbes magazine. He is acknowledged
as one of the true pioneers of energy trading, as well as one of the oldest managers still running
money - he will be 80 next year. He has featured on the front of Time Magazine and considered a run for
president in 1988. Donated $7m to Hurricane Katrina relief effort.
Bridgewater Ray Dalio Westport, Conn. Currency
overlay, credit
and emerging
market debt
Hedged:
$30.2bn Total:
$150bn
One of the longest serving hedge fund managers, Dalio has built Bridgewater into a multi-faceted fi rm with a
total of $150bn in assets under management. Considered a pioneer of currency overlay strategies.
Bulldog Investors
Philip Goldstein Saddle Brook,
NJ.
Activist $1bn Mr Goldstein scored a big win against the Securities and Exchange Commission last year when he won a
lawsuit challenging the right of the regulator to require hedge fund advisers to register with it. The rules were
thrown out as a result. He is being sued by offi cials in Massachusetts who claim he improperly marketed his
funds to unqualifi ed investors by providing information on his web site - which now reads “currently being
updated”.
Cantillon William von
Mueffl ing
New York and
London
Long-short
equity
$8.1bn Cantillon World:
5.6%
Mr von Mueffl ing gave one of the clearest indications yet of the power of the star hedge fund manager when
he left Lazard Asset Management in 2003, taking much of its $4bn in hedge fund assets and a large number
of the rest of the fi rm’s alternative investment team with him after a spat over pay. Earlier this year it voluntarily
closed its $1bn technology and $350m healthcare funds, saying it could not fi nd enough investment
opportunities - a move investors applauded.
Blue Wave
(Carlyle
Group)
Ralph Reynolds,
Rick Goldsmith
New York Multi-strategy Hedged:
$750m, Total:
$56bn
Recently launched an event driven fund with less than $750m serving as further evidence of convergence
between private equity and hedge funds. The group has over $56bn under management in its private equity
group, and is considering whether to go public, following the footsteps of Fortress and Blackstone.
Name Manager Main
Location(s)
Strategy Funds under
management
as of Jan 1
2007
Flagship
performance,
2006 %
Why it is in the list
Caxton Associates
Bruce Kovner New York Managed
futures, global
macro
$14.2bn 13% Mr Kovner’s made his fi rst trade by borrowing $3,000 on a credit card to buy soybean futures. The contract
rose to $50,000, but he then watched the contract drop to $22,000 before selling. He later said that this
fi rst trade taught him the importance of risk management. Notoriously secretive, Mr Kovner’s 5th Avenue
Mansion in New York City features a lead-lined room to protect against a chemical, biological, or dirty bomb
attack. He is chairman of neoconservative think-tank the American Enterprise Institute
Centaurus
Energy
John Arnold Houston, Texas Energy focused $3bn 317% Mr Arnold, a former natural gas trader at Enron, started Centaurus with about $8m of his own cash after the
energy group collapsed. Last year his legend grew as his fortunes and trading positions in natural gas were in
direct contrast with those of Brian Hunter, the infamous Amaranth Advisors trader, also 32 years old at the
time, who last year presided over the loss of $6bn and the eventual closure of his fund.
Cerberus
Capital
Steve Feinberg New York Distressed total: $16.5bn
(Oct 2006)
21% Cerberus runs both hedge fund and private equity, where it specialises in distressed companies. It owns
or part-owns the fi nance arm of General Motors, banks in Japan and Austria, and Formica, maker of the
eponymous kitchen surface. Best-known as the employer of Dan Quayle, former US vice president, Cerberus
recruited former US Treasury secretary John Snow as chairman last year.
Citadel Ken Griffi n Chicago Multi-strategy $12bn Citadel is one of the most active trading fi rms in the world, and is rapidly diversifying into areas traditionally
dominated by investment banks including marketmaking and servicing hedge funds. On any given day it
can account for over 3 per cent of all trading volume on NYSE Euronext. Last year it became the fi rst hedge
fund to access the public debt markets and is widely thought to be considering an initial public offering of its
stocks. Griffi n founded Citadel in his Harvard dorm room and is married to Anne Dias Griffi n, who runs her
own hedge fund, Aragon Global Management, one of the largest run by a woman.
Citigroup/
Tribeca
Oliver Dobbs,
Albert Ee, Gay
Huey Evans,
Steve Geovanis,
Rick Harrell,
Sofi a Katzap
New York Multi-strategy
and standalone
Tribeca $2.3bn,
total alternatives:
$26bn
8.50% Tribeca is Citigroup’s attempt to catch up with Goldman Sachs in the hedge fund business by building its own
fund internally. But the bank reversed strategy this month when it bought the $4.5bn fund Old Lane for an
estimated $600m, mainly to secure Vikram Pandit, its head, to run its alternative investment business. This
prompted Dean Barr to step down as head of the hedge fund unit, and has led to questions both about Citi’s
strategy and whether Old Lane will see an outfl ow of investors, particularly after its disappointing performance
last year. Tribeca uses a multi-strategy style similar to Old Lane’s. Tribeca lags behind its peers so far
this year with a 1 percent gain through March, compared with an industry average of 2.9 per cent. Pandit left
Morgan Stanley in March 2005 during a power struggle after running its biggest and most-profi table division,
institutional securities, for fi ve years.
Clarium Capital Peter Thiel San Francisco,
New York
Global macro $1.9bn Prior to starting Clarium, in 2002, Thiel sold PayPal to eBay for $1.5bn. In 2005, Clarium was honored as
the global macro fund of the year by both MarHedge and Absolute Return, two hedge fund trade magazines.
While at Stanford, he founded The Stanford Review, now the university’s main conservative/libertarian newspaper.
Recently co-produced the feature fi lm Thank You for Smoking. Clarium runs a contrarian approach
based on top-down themes, currently including energy and petro-dollars as the source of the global wave of
liquidity.
Convexity Jack Meyer Chicago Emerging markets,
bonds
$6.3bn Recently installed in a 29,700 sq ft offi ce on the 57th fl oor of the John Hancock building, Chicago. Convexity’s
was one of the largest capital raisings, if not the largest ever by a hedge fund, opening with about $6bn
and surpassing former Goldman Sachs star Eric Mindich’s $3.5bn at his Eton Park hedge fund. Convexity is
said already to possess many of the characteristics of more mature asset management institutions.
DE Shaw David Shaw New York Multi-strategy $26.3bn 17.3%(composite
fund)
DE Shaw consistently ranks in the top fi ve hedge fund groups by assets. It was once termed by Fortune magazine
as the most intriguing and mysterious force at work on Wall Street. The company is extremely selective
in its hiring, with only 1 in 500 candidates making the grade. It employs cutting edge, complex mathematics
for its quantitative investment processes. Dr Shaw served as an advisor on President Clinton’s council of
Advisors on Science and Technology, and Larry Summers, Clinton’s secretary of the Treasury, works at DE
Shaw part time. More recently the fi rm has branched out in qualitative strategies, while its private equity
investments include FAO Schwartz, the famous US toy shop, and eToys, formed from the remains of retailer
KB Toys.
Dillon Read
(UBS)
John Costas,
William Brown,
John Larum,
Joe Scoby
New York Fixed income $3.5bn John Costas carved Dillon Read out of UBS’s principal fi nance and commercial real estate businesses as an
in-house hedge fund, bringing 175 traders under him. The move was widely seen as an attempt to stem
defections of investment bankers to hedge funds.
Elliott Associates
Paul Singer New York Distressed,
activist, multistrategy
$7bn 15.90% Elliott Associates is one of the oldest hedge funds under continuous management. Known for its fi erce activism,
it has gained a high profi le in Germany, where it fought alongside small shareholders to prevent staffi ng
company Adecco delisting the remaining minority of DIS. It recently built up a sizeable stake in retailer Pier 1
Imports and is pressing the company to cut costs and bring in more independent board members.
ESL Investments
Edward Lampert
New York Activist, distressed
$18bn 40% plus Founder Edward Lampert is already being called his generation’s Warren Buffett. He started ESL when he was
just 25 after earning an economics degree from Yale. Average returns since have been almost 30 per cent.
ESL is now the largest shareholder of Sears, owner of Kmart, where he also serves as the chairman. In 2003
he was kidnapped at gunpoint from a car park at ESL’s Greenwich, Connecticut offi ces. Four captors held him
for ransom, keeping him bound and blindfolded for some 30 hours before he negotiated his own release. The
kidnappers were caught after Lampert’s credit card was used to order pizza. The ‘mastermind’ of the plot
was sentenced to 15 years in prison earlier this year.
Eton Park Eric Mindich New York Multi-strategy $6.2bn 13% (2005) When Eton Park started up in 2004 it was the biggest launch ever, raising $3.5bn from investors thanks to
the reputation Mr Mindich built as head of risk-arbitrage at Goldman Sachs, where he had become the bank’s
youngest partner aged 27. Eton Park is becoming an increasingly important actor in global markets recently
raising $550m for emerging markets private equity investments
Farallon Thomas Steyer San Francisco merger arbitrage,
multistrategy
$26.2bn 20% Farallon, one of the largest hedge fund groups in the world, has been active in the subprime mortgage area,
buying up distressed assets and lending to one cash-strapped mortgage company. Its private equity operations
are growing, and it is often mentioned as a possible initial public offering candidate.
Fortress Wes Edens New York global macro,
multi-strategy
$30bn 17% Fortress in February became the fi rst big US-based hedge fund and private equity manager to list its shares.
The big jump in Fortress’ stock is expected to lead to several other hedge fund IPOs.
FrontPoint Gil Caffray Greenwich,
Conn.
multi-strategy $5.5bn 7.95% Morgan Stanley purchased FrontPoint in November for an undisclosed sum (sources said around $300m)
as part of the bank’s efforts to build its alternative investments business. FrontPoint was founded by former
Morgan Stanley executives.
Greenlight
Capital
David Einhorn New York Long/short
equity
$4.7bn 13% Mr Einhorn has become something of a reluctant activist in recent years, winning a board seat at troubled
mortgage lender New Century Financial and fi ling a whistleblower lawsuit against Allied Capital. Mr Einhorn
resigned from the New Century board prior to the lender’s fi ling for bankruptcy protection.
Goldman Sachs
Asset Management
Eric Schwartz
and Peter Kraus
New York multi-strategy $32.5bn Global Alpha:
-10%
GSAM is the second largest hedge fund manager in the world after JP Morgan. Despite a rough 2006, the
group’s fl agship Global Alpha fund has historically generated very strong returns including a 40 per cent gain
in 2005.
Name Manager Main
Location(s)
Strategy Funds under
management
as of Jan 1
2007
Flagship
performance,
2006 %
Why it is in the list
Highfi elds
Capital
Jonathon
Jacobson and
Richard Grubman
Boston activist $10bn 22.40% Mr Grubman famoulsy grilled then-Enron chief Jeff Skilling on a conference call, leading Mr Skilling to call
him an unprintable name. More recently, Highfi elds has been a vocal opponent of the terms of the proposed
buyout of Clear Channel.
Icahn Partners Carl Icahn New York activist $5.5bn 24.80% Mr Icahn is one of the world’s most famous investors, having started out as a corporate raider fuelled by
Michael Milken’s junk bonds in the 1980s. He is now one of the most vocal activist hedge fund managers,
currently agitating for change at Motorola, among other places. He failed in his bid to break up Time Warner
but still won concessions and turned a tidy profi t on his investment in the media giant.
JP Morgan/
Highbridge
Glenn Dubin New York multi-strategy $34bn 21.17% According to Absolute Return magazine, JP Morgan became the worlds largest hedge fund manager in 2006
largely on the strength of its acquisition of Highbridge Capital. JP Morgan’s purchase kicked off a wave of big
investment banks taking stakes or buying hedge fund managers outright.
JWM Partners John Meriwether
Greenwich,
Conn.
multi-strategy $2.6bn 7.50% Mr Meriwether’s Long Term Capital Management nearly collapsed in 1998 and needed a $3.6bn bailout amid
the Russian debt default. But he was back in business a year later and earned positive marks in February
when his fund gained even as global markets plunged.
Kingdon Capital Mark Kingdon New York multi-strategy $5.9bn Kingdon Offshore:
13%
Mr Kingdon, a former pension fund administrator at AT&T, has been among the most successful hedge fund
managers on Wall Street since launching his fi rm in 1983 with $2m.
Kynikos James Chanos New York short-biased $3.5bn Mr Chanos, widely regarded as the dean of short-sellers, is best known for his early bet that Enron Corp.
was overvalued and ripe for a fall. He also made a bundle last year betting that internet gaming shares would
decline. They plunged when the US Senate passed tough new laws cracking down on Web gambling.
Lone Pine Stephen Mandel Greenwich,
Conn.
Long-short
equity
$11bn Lone Cedar:
8%
Mr Mandel is a “Tiger cub” who trained under legendary manager Julian Robertson at Tiger Management. Mr
Mandel’s early enthusiasm for Google led many other investors to pile into the Internet search engine stock.
Like other star managers, Mr Mandel takes little new money.
Magnetar Alec Litowitz Evanston, Ill. multi-strategy $4.1bn 7% Mr Litowitz left Citadel in 2005 to found Magnetar. In a recent letter to BusinessWeek, he said his fund
anticipated volatility in the subprime mortgage market, which he called “very favorable” to his strategy.
Maverick
Capital
Lee Ainslie Dallas, Texas $9.3bn 12.40% Another Tiger cub, Mr Ainslie prides himself on heavy fundamental research. After notching several years of
20 per cent plus performance, Maverick went fl at in 2005, leading Mr Ainslie to apologise to investors, who
nevertheless withdrew 15% of the assets last year.
Millennium
Partners
Israel Englander New York multi-strategy $8.6bn Millennium
Capital: 17%
Millennium got caught up in the mutual fund market timing scandal, paying $180m to settle with regulators,
but Mr Englander remains one of the most senior and respected members of the hedge fund community.
Moore Capital Louis Bacon New York Global macro $12.5bn Moore Global
Investment: 8%
Along with his friend and fellow hedge fund superstar Paul Tudor Jones, Mr Bacon is one of the survivors of
old-style global macro investing. With a pedigree dating back to the mid-1980s Mr Bacon’s investment style
is more risk-averse than many of the other higher-performing global macro funds. Mr Bacon tends to keep
his head down and defends his privacy carefully.
Och-Ziff Dan Och New York Multi-strategy $21bn 15.86% Och-Ziff has branched out into private equity and direct lending to companies and launched successful funds
focused on Europe and Asia. The hedge fund group also helped Malcom Glazer with his takeover of Manchester
United, lending him a chunk of the money for the bid.
Omega Advisors Leon Cooperman
New York Value/activism $5.5bn 12% (2005) Mr Cooperman is among the more outspoken US hedge fund managers. In 2005, he repeatedly berated MCI
for accepting a takeover bid from Verizon that he said was too low.
Ospraie Management
Dwight Anderson
New York Basic industries,
commodities
$5bn 1.39% Mr Anderson, who ran commodities trading for Tiger Management, took some losses last year on a bearish
bet on copper. But he has delivered excellent returns over the years. Lehman bought a 20 per cent stake in
Ospraie in 2005.
Paulson & Co. John Paulson New York Merger arbitrage,
restructuring
$7.1bn Paulson Partners:
16.81%
Mr Paulson bet correctly on the collapse in the subprime mortgage market in the US, making returns of more
than 60% in February alone in one fund. The value of a fund he set up last year to bet on the decline has
doubled to $1bn, but the company remains more focused on its traditional merger arb business. It became
one of the largest investors in the London Stock Exchange this year as it helped the company fi ght off a bid
from Nasdaq.
Pequot Capital Arthur Samberg Westport, Conn. Multi-strategy $7.3bn 10% Pequot received some unwanted attention last year when a former Securities and Exchange Commission
regulator said his attempt to investigate alleged insider trading at the hedge fund - involving John Mack, who
was briefl y Pequot chairman before leaving to head Morgan Stanley - was blocked over political considerations.
The SEC dismissed those allegations and exonerated Pequot. The fi rm has its own $1.8bn technology
venture capital operation.
Perry Capital Richard Perry New York Multi-strategy $13bn Perry Intl: 10% Perry Capital is one of a handful of big hedge fund groups that is thought to be considering an initial public
offering. Mr Perry has been involved in some high-profi le deals, and has backed the movie studios of Hollywood
moguls Bob and Harvey Weinstein.
Pirate Capital Tom Hudson Norwalk, Conn Activist, eventdriven
9.50% With a frigate as its logo, an offi ce full of swashbuckling paraphenalia and a self-imposed reputation as buccaneers,
Pirate Capital specialises in fi ring public shots across the bows of companies it sees as badly-run.
Its motto is “surrender the booty”, and the offi ces feature a life-size pirate model. Last year, though, Mr
Hudson was hit by a mutiny, with more than half his staff leaving and many investors withdrawing money.
PSAM Peter Schoenfeld
New York Event-driven $2.8bn Specialises in global arbitrage and is said to take a longer term view of its investments than many of its
peers. Best known for its global event driven strategy, PSAM also focuses increasingly on distressed assets.
Renaissance
Technologies
James Simons New York State Quant $24bn Medallion: 40% Mr Simons is the hedge fund manager’s hedge fund manager. Secret to the point of paranoia, Renaissance’s
Medallion fund was long the most consistent strong performer in the industry, using quantitative analysis
and computer-driven rapid-fi re trading across equities, bonds, currencies and commodities. The fund
was so successful it pushed its fees to 5% a year and 44% of profi ts before ejecting external investors to
concentrate on money from family and friends. A new fund started two years ago, though, is aiming to raise
an astonishing $100bn by targeting the desire of institutional investors for returns of 10% a year with low
volatility.
SAC Capital Steven Cohen Stamford,
Conn.
Multi-strategy $12bn 34% Top dog in the hedge fund world, Mr Cohen is one of most successful and talked-about traders. SAC’s phenomenal
performance has made Mr Cohen one of the most valued, and richest, fund managers in the world.
SAC has the highest fees in the industry, charging 3% a year and 50% of profi ts, but still has investors
queueing up thanks to strong and consistent returns. It is one of the most prolifi c investors, making up a big
chunk of stock market turnover, and recently moved into private equity. Mr Cohen’s sprawling Connecticut
mansion - complete with skating rink, golf course and basketball court - and his $100m-plus art purchases
have made him a poster child for the excesses of the hedge fund industry. Last year he faced a lawsuit from
Biovail, a Canadian pharmaceutical company, which claimed $4.6bn and accused SAC and others of ghostwriting
supposedly independent stock research to drive its shares down.
Name Manager Main
Location(s)
Strategy Funds under
management
as of Jan 1
2007
Flagship
performance,
2006 %
Why it is in the list
Silver Point
Capital
Edward Mulé,
Robert O’Shea
Greenwich,
Conn.
Mulit-strategy
credit/distressed
$6bn 16.70% From Estonian steel to Michigan auto suppliers, Silver Point specialises in distressed situations and frequently
ends up as owner or part-owner of bankrupt companies. The Goldman alumni who run it have become powerful
figures in the distressed debt markets, although they invest across debt and equity.
Steel Partners Warren Lichtenstein
New York Activist $4bn 16.50% Mr Lichtenstein is a veteran activist investor not afraid to take board seats or take companies private. He is
active globally, especially in Asia.
Third Point
Partners
Daniel Loeb New York Event-driven $4.7bn 15.00% Mr Loeb is an aggressive and outspoken activist investor whose public rants against companies he targets
have become required reading on Wall Street. He badmouths executives and rival investors but his research
into personal and corporate overlap - examples include naming executives in private boxes at sporting events
and calling for chauffer-driven limos to be replaced by subway tickets - secures a loyal following.Event-driven
investor who makes forays into activism several times a year via filings that are must-read on Wall Street.
Touradji Capital Paul Touradji New York Commodities/
energy
$1.7bn 27.20% Another former Tiger cub, Mr Touradji had to close his respected Cataquil fund after an acrimonious legal
battle with former partner Robert Ellis. But he remains a force to be reckoned with in the commodity markets,
making big bets on everything from copper to coffee beans.
TPG-Axon Dinakar Singh New York Multi-strategy $6bn 14.90% Spun out of Texas Pacific private equity group 2 years ago, and run by former Goldman Sachs star
Trafelet & Co Remy Trafelet,
LC Kvaal
New York Long-short
equity
$5.7bn 1% A low-profile stockpicking firm run by two former Fidelity manager, Trafelet is known for the depth of its research
- including paying students to count the vehicles in shopping centre car parks and visiting thousands
of companies a year. Up 15% this year.
Tudor Paul Tudor
Jones
Greenwich,
Conn.
multi-strategy $15bn 18% Mr Tudor Jones is one of the most celebrated and long serving hedge fund managers. His $50m Connecticut
waterfront estate is said to resemble Tara from Gone with the Wind. He is one of the many hedge fund managers
actively engaged in charitable work. His Robin Hood foundation combates poverty in New York City.
Tontine Jeffrey Gendell Greenwich,
Conn
event-driven $7bn 9% Gendell is part owner of the Cincinnati Reds baseball team. Last year was relatively disappointing after stellar
performance in 2004 and 2005 based in no small part on bets on the homebuilding sector.
Soros Fund
Management
George Soros New York Global macro 11.3bn 12% Mr Soros is quite simply a legend. Even though he now spends much of his time on phjlanthropy and politics,
the Hungarian-born investor remains a powerful force in the hedge fund business and earned almost $1billion
last year. Much of his net worth resides in the Quantum endowment fund, which was up 12 per cent last
year.
York Capital James Dinan New York event-driven $9bn 13% Very active traders on a global basis; recently tried to buy Israel’s biggest mutual fund group, Psagot Ofek,
from Bank Leumi
EUROPE FUNDS
Barclays Global
Investors
Team-based
including Stan
Beckers, Ken
Kroner
San Francisco,
London
Quantitative Hedged:
$18.9bn Total:
$1,800bn
n/a The low-key BGI, part of British bank Barclays, is among the world’s biggest hedge fund managers thanks to
the extension of its quantitative, computer-assisted, long-only strategies into long-short equities, currencies,
and bonds.
BlueBay Asset
Management
Hugh Willis,
Mark Poole
London Fixed income:
investment
grade, high
yield and
emerging
markets
Hedged:
$3.6bn, total
$9.6bn
Global
Credit: 5.4%;
Value Recovery:
15.4%; Emerging
Markets:
17.6%
One of London’s larger credit operators, BlueBay is driven by fundamental research but has taken activist
positions in the past to defend distresssed debt investments. It joined the wave of listings by hedge fund
managers last November, earning founders Mr Willis and Mr Poole £30m each in cash plus stakes then
valued at £72m each.
BlueCrest
Capital
Michael Platt,
William Reeves
London Multi-strategy $11.6bn AllBlue 11.49% BlueCrest has successfully diversified from its roots in fixed income, moving into equities, currencies and
managed futures as well as a listed fund of its own funds. With strong risk controls Messrs Platt and Reeves
aim to replicate an investment bank prop desk. BlueCrest was the first spin-off from JP Morgan. but had a
hiccup last August when big bond losses prompted the exit of a key trader and the closure of its Newport
Beach, California office, its first venture overseas. Man Group bought a quarter of the firm in 2003, for
£105m.
Boussard &
Gavaudan
Emmanuel
Boussard and
Emmanuel
Gavaudan
London and
Paris
Multi-strategy
with a strong
activist slant
€1.6bn Sark Fund:
21.3%, vol
3.78%
The two Emmanuels feature as key players in an increasing number of mid-market UK and French deals.
They are also active in the capital markets, having floated the first main market listed hedge fund last year, in
Amsterdam, raising €440m. They are also rare in using euros as their currency of choice for describing their
size, against the dollars adopted by almost everyone else in the industry.
Brevan Howard Alan Howard London Global macro $12.09bn Master Fund:
11.1%
The secretive Alan Howard is regarded as one of London’s best macro traders, producing more than 10% a
year since setting up four years ago, in a poor environment for the macro style. He presides over a floor of
semi-independent traders modelled on an investment bank prop desk. T
Brummer &
Partners
Patrik Brummer Stockholm Multi-strategy $4.4bn Zenit (SKr):
16.32%
Brummer is the biggest Nordic hedge fund manager, running a complex of funds held through minority
stakes it acquires in new managers. Performance has been mixed over the years, with Zenit starting as one of
the world’s best long-short funds but plummeting to two years of losses before recovering in 2005. Last year
its $1bn Latitude macro fund had to shut down after disastrous wrong-way bets on British interest rates led
to losses put at 31%.
Cambridge
Place Investment
Management
Martin Finegold,
Bob Kramer
London, Boston Credit, structured
finance
Hedged:
$1.6bn, total
$10.5bn
Structured
Credit 1,000:
16.12%
Cambridge Place is a big player in the structured credit markets, and rapidly diversifying into real estate
too. It was one of the big losers from the US sub-prime crisis, with Caliber, its London-listed CDO investment
vehicle, seeing net assets fall 22% in February alone, while its main fund was down about 2.5% in the
month. Martin Finegold, one of the founders, previously set up and floated British sub-prime lender Kensington
and set up an electronic network for financial advisors.
Centaurus
Capital
Bernard Oppetit,
Randy
Freeman
London Event-driven
equity long/
short
$4bn 15.91% Along with New York’s Paulson & Co, Centaurus became the latest fund to be labelled a “locust” last year
when the Dutch economy minister took umbrage at their attempt to break up local supermarket group Ahold
and conglomerate Stork. Willing to resort to high profile legal action, Centaurus is also moving into private
equity, working with buyout group Permira on a possible €4bn bid for Atos Origin, the French IT services
company.
Cheyne Capital Jonathan
Lourie, Stuart
Fiertz
London Multi-strategy $11.2bn Special Situations:
18.3%
Long/short
Credit: 12.03%
Multi-strategy
(unleveraged):
8.5%, plus
1.5% rebate
One of the fastest growing fund managers of the past two years, Cheyne has gone from $2bn to $10bn as it
expanded from its base strategy aiming for low volatility returns from investing in convertibles, and now runs
special situations and long/short equity as well as being a big player in structured products such as CDOs.
Currently trying to cope with negative publicity around the poor share price performance of Queen’s Walk, its
listed CDO investment vehicle, which has suffered from the US sub-prime mortgage fallout.
Name Manager Main
Location(s)
Strategy Funds under
management
as of Jan 1
2007
Flagship
performance,
2006 %
Why it is in the list
CQS Michael Hintze London Convertible and
equity arbitrage
$6.1bn 15.47% One of the handful of convertible bond arbitrage specialists that survived the implosion of the sector in
2005, CQS has diversifi ed and is now a big player in the credit markets, as well as running a listed company
specialising in loans for oil rigs. Mr Hintze himself also attracts headlines for his philanthropy - including a
gallery named after himself and his wife at the Victoria & Albert Museum - and his controversial £2.5m loan
to Britain’s Conservative Party.
Egerton Capital John Armitage London Long-short
equity
$5.4bn, total:
$6bn
European Dollar
(B1): 26.07%
Mr Armitage is one of the longest-standing British hedge fund managers, having set up with partner Bill
Bollinger, since retired, in 1994. Since then he has produced annual returns averaging more than 21% and
stuck to the long-short equity space, although now with parallel long-only funds too. An innovative new fee
structure gives investors a lower performance fee of 15% in exchange for a modifi ed “high watermark” under
which they pay fees on gains after a fall, although at a half-rate. With the old fee structure of 20% of profi ts
no fee was paid on gains until net asset value passed its all-time high.
Ferox Capital Jeremy Herrmann
London Convertible
arbitrage
$1.9bn 22% Ferox shot to tabloid newspaper fame when Mr Herrmann paid himself £11.4m in 2004, with the media
storm heightened by his position as a world champion fl y fi sherman - who chose to name his fund after
a cannibalistic trout. Mr Herrmann invited further interest this year when he sued Ernst & Young for fi ling
company accounts on the wrong day - leading to a big donation to charity by the auditors. Ferox itself is one
of a few funds to continue specialising in convertibles after the sector collapsed in 2005, a decision which
paid off handsomely last year.
Fulcrum Asset
Management
Gavyn Davies,
Christian Siva-
Jothy
London Global Macro $500m SemperMacro
alone
SemperMacro:
-15%
SemperMacro was one of the highest profi le launches of 2005, chaired by Mr Davies, former chairman of the
BBC, and run by Mr Siva-Jothy, former head of the macro prop desk at Goldman Sachs. But investors pulled
out in droves at the end of last year following poor performance, when an 18-month lock-up period expired.
Semper lost more than $1bn to leave it with less than $500m, but the group has other assets too.
Gartmore Roger Guy London Long-short
equity
Hedged:
$10bn, total
£23bn
Alphagen
Capella: 14%
Roger Guy is one of the handful of star fund managers successfully running both retail long-only money and
hedge funds. In his case he has been so successful that he was able to spearhead a private equity-backed
buy-out of Gartmore, where he is the single biggest fee earner and is said to be the biggest shareholder
among the group of 20 staff involved in the deal.
GLG Partners Noam Gottesman,
Pierre
Lagrange, Emmanuel
Roman
London Multi-strategy $18bn Market Neutral:
25.6%;
European
Long-Short:
17.1%; Emerging
Markets:
59.9%
London’s second biggest hedge fund, GLG is aiming for the big time. GLG is emerging from the shadow of a
long-running FSA investigation into convertible bond trading by star manager Philippe Jabre - which led to
his exit to establish a new fund, along with a £750,000 fi ne - and a €1.2m fi ne from French regulators over
similar trades. Co-chief executive Manny Roman, who arrived from Goldman Sachs in 2005, is recruiting
heavily to expand into new areas and grow the long-only business, and GLG has become a big part of the
London hedge fund establishment. It is 15% owned by Lehman Brothers.
Hermitage
Capital Management
William Browder London and
Moscow
Russia activist $3.2bn 38.60% Bill Browder is a living example of the dangers of activist investing in emerging markets: he currently runs the
biggest foreign fund in Russia from an offi ce in London’s Covent Garden after his visa was cancelled in what
he believes was political manoevring by companies he had attacked. Still, the ban has not hurt performance,
while Mr Browder’s activism over a decade has helped foster corporate governance in what was long dubbed
the “wild East” for investors. Mr Browder, an American, has deep ties to Russia through a Russian grandmother
and a grandfather who ran the American communist party.
KBC Alternative
Investment
Management
Carlo Georg London Multi-strategy
with core of
relative value
arbitrage
$1bn Diversifi ed:
May-Dec:
9.13% annualised:
14.01%*
The hedge arm of the Belgian bancassurer spent much of the past year in crisis mode, rebuilding after being
severely battered by the convertibles storm of 2004-05. Assets collapsed from $5bn at the end of 2004
and all but one of the fund range was shut down, with a new line launched under new leadership last year.
KBC has injected all its proprietary trading capital into the funds, said to be well over $100m, as a sign of
confi dence that it can start again, and growth has restarted, with assets increasing 20% so far this year.
Lansdowne
Partners
Paul Ruddock,
Steven Heinz,
Peter Davies,
Stuart Roden
London Long-short and
macro
$14bn European
Equity: 15.82%
UK Equity (£):
23.24%
Lansdowne is regularly rated as one of the best hedge fund managers in London, no doubt a key factor
behind Morgan Stanley’s decision to pay $300m last year for a 19% stake. It has started to build out from
its long-short stockpicking speciality, setting up specialist fi nancial sector and global macro funds and a
long-only product, but remains focused on UK and European long-short equities. Notable successes include
building a big stake in Manchester United Football Club ahead of its takeover, and recruiting Arnab Banerji,
former economic adviser to Tony Blair.
London Diversifi
ed Fund
Management
David Gorton London Fixed Income $3.22bn 5.76% Started as an in-house fund for JP Morgan in the mid-1990s, LDFM was spun out in 2002, although the
bank is thought to have continued investing with its former fi xed income team, regarded as among the best
in the City. Mr Gorton keeps a low profi le even by hedge fund standards but briefl y stuck his head above the
parapet when he went public with his support for the campaign against a European constitution.
Man Group/
AHL
Tim Wong London Managed
futures
Hedged:
$18.8bn. Total:
$60bn
AHL Diversifi ed:
6.4%
AHL, a computerised trend-follower, is the fl agship division of the Man Group, the biggest listed hedge
fund manager and a member of the FTSE 100 index. AHL suffered badly from the market rout at the end of
February and during March as the notoriously volatile managed futures sector was hit by uncertainty spread
across the equities, bonds, currencies, and commodities they trade. AHL remains down for the year, but Man
can fall back on a range of smaller funds, its stake in BlueCrest and a range of funds of hedge funds, all of
which it sells through packaged or guaranteed products. The group itself has just changed leadership with the
well-known Stanley Fink moving to a non-executive job and Peter Clarke, fi nance director, replacing him as
chief executive. Man is best-known outside hedge funds for sponsoring the Booker Prize but is also big on
corporate philanthropy, pledging a proportion of fees to charity.
Marshall Wace Ian Wace, Paul
Marshall
London Long/short
equity
$11.5bn Eureka:
24.45%
Marshall Wace shot to public prominence last year when it launched the biggest-ever hedge fund listing,
raising €1.5bn in Amsterdam for its “Trade Optimised Portfolio System”, which fi lters broker tips to decide
investments. Tops prompted suspicions from rivals that commission rewards for the best tippers could lead
brokers to bend the rules but it was given a green light by regulators, and Marshall Wace has extended the
system to cover Asia and the US, with a global version being launched. It also has the more conventionally
run Eureka fund. Paul Marshall has stepped back from day to day money management to focus on running
the company, and is a big donor to the Liberal Democrats, as well as chairing a liberal think tank.
Jabre Capital
Partners
Philippe Jabre Geneva Multi-strategy
with a focus on
convertibles
$2bn (as of
April 2007)
Philippe Jabre earned notoriety last year when he was given a record personal fi ne by British regulators over
trading in convertible bonds while he was working at GLG. But his reputation as one of Europe’s best fund
managers survived intact and investors stuck with him when he decided to move to Geneva and open his own
fund. He raised more than $1bn at launch this year, and is aiming for $2.5bn, including parallel long-only
funds, by the end of the year.
Polygon Investments
Reade Griffi th,
Alexander
Jackson, Paddy
Dear
London and
New York
Multi-strategy $5.9bn 23.30% Polygon shot to instant City fame in 2004 when it unsuccessfully tried to block a £5bn government-backed
restructuring of British Energy, the struggling nuclear generator. It proved its activist credentials - even as it
insisted it hates the activist label - when it blocked an agreed bid by rival Fortress for Marconi rump Telent.
But it came to wider public attention only last year when it entered takeover talks, eventually abandoned, for
Newcastle United Football Club. Has just raised $300m for Tetragon, a $930m fund investing in the equity
portion of collaterised debt obligations, which it describes as a “synthetic bank”.
Name Manager Main
Location(s)
Strategy Funds under
management
as of Jan 1
2007
Flagship
performance,
2006 %
Why it is in the list
RAB Capital Philip Richards London Multi-strategy
with focus on
special situations
$5.3bn Special Situations:
43%
RAB’s focus on mining and energy stocks has made its Special Situations fund a top performer in the industry,
but the acquisitive group - run by Mr Richards and Michael Alen-Buckley and named for their initials
- is also expanding rapidly into other long/short strategies and fi xed income. RAB is listed on London’s Aim
market and is keen to use its shares as an acquisition currency, while the company has also proved appealing
to billionaire steel magnate Lakshmi Mittal, whose family trusts hold 8 per cent. Offbeat investments include
Ethiopian forestry and the A1 motor racing league, while Mr Richards has attracted headlines for philanthropy,
giving £4.6m to charities and his church last year.
Red Kite Michael Farmer,
David Lilley,
Oskar Lenowski,
David Waite
London and
New York
Commodities >$1bn Metals: 190% Red Kite is one of the biggest players in the base metals markets, with rumours that it was in trouble earlier
this year prompting a 9% fall in zinc prices in a day. Mr Farmer and Mr Lilley - dubbed the “God squad” by
metals traders for their evangelical Christianity - produced phenomenal returns from betting the right way
on copper last year, although they suffered badly in January as the metal’s value plummeted. Traders believe
they built up a massive position in aluminium too this year, although it is unclear whether that has paid off.
Sloane Robinson
Hugh Sloane,
George Robinson,
Richard
Chenevix-
Trench
London Emerging
markets, equity
long/short
$10.9bn SR Global-
International:
20.8%
One of London’s oldest hedge funds, Sloane Robinson has stuck to its long/short strategy since starting
up in 1993 - with great success. Its approach of investing for 1-3 years has produced solid double-digit
annual returns and given the partners a reputation for knowing their way round Asia’s emerging markets. SR
has also distinguished itself by publicly rejecting the diversifi cation into multi-strategy of most of their large
peers, while Messrs Sloane and Robinson have attracted attention for philanthropic activities, including a
£6m investment in Oxford’s Keble College.
The Children’s
Investment
Fund
Chris Hohn London Activist $10.3bn Europe’s best-known activist, Chris Hohn sent shockwaves through cozy European corporate management
when he and a group of allies brought down Deutsche Borse’s bid for the London Stock Exchange and
forced the resignation of Rolf Breuer, its chairman. Ignoring accusations from German politicians that he is
a “locust”, this year he launched an assault on ABN Amro, shortly before Britain’s Barclays launched a bid
for the Dutch bank. But Mr Hohn is equally well known as Britain’s most generous philanthropist, giving away
£50m in 2004-2005, as TCI automatically gives a big chunk of its fees to a children’s charity run by his
wife, Jamie Cooper-Hohn.
Thames River
Capital
Charlie Porter London Long-short
equity, credit
Hedge: $3bn;
Total: $10.7bn
Hillside Apex:
10.15%
Thames River had a strategic setback last year when it abandoned plans to fl oat, losing its chief executive
and one of its co-founders in the process and seeing its fi nance director go part-time. The company, backed
by entrepreneur Sir John Beckwith, has built a solid franchise with its long-only and funds of hedge funds in
the UK, in addition to a successful range of long-short funds and Nevsky, the $1.4bn emerging markets fund
split off late last year. Nevsky ended the year up 44%, its sixth year of gains above 28%, as it rode the boom
in the Russian and Chinese markets.
Toscafund Martin Hughes London Long-short
equity
$5bn 21.80% London’s Tiger cub. Martin Hughes, a plain-spoken former acolyte of Julian Robertson at his Tiger Management,
is a fi nancial sector specialist and behind-the-scenes activist who occasionally emerges into the
limelight with public attacks on companies. Most recently Tosca added its voice to criticism of ABN Amro and
called for a merger, while its undisclosed stake in Prudential has led to hopes among other investors that Mr
Hughes will try to shake up the underperforming British insurer. Tosca also holds big stakes in broker Collins
Stewart and project manager Amec. Mr Hughes himself has begun to diversify, with his Old Oak holding
company buying Cheviot Capital, a private client asset manager, while he beefed up his team by bringing in
former Royal Bank of Scotland chairman Sir George Mathewson and Fred Watt, RBS’s ex-fi nance director, as
non-executives.
Vega Asset
Management
Ravinder Mehra Madrid, New
York
Global macro $5bn (Sept
2006)
Select Opportunities:
-15.6%
Vega, originally backed by Spain’s Banco Santander, has had a dire 12 months. A series of bearish wrongway
bets on bonds by Mr Mehra has seen the fund manager lose not only its position as Europe’s biggest
hedge fund three years ago, when it had $12bn, but also more than half its investors. As of the end of September
it had $5bn left but it remains unclear how many more withdrew money after the fl agship higher-risk
fund plummeted 10.6% that month.
ASIA FUNDS
Basis Capital Steve Howell,
Stuart Fowler
Sydney Relative value,
long-short
credit, structured
credit
$923m Pac-rim Opportunity:
12.82%
Steve Howell is a highly visible fi gure on the Sydney hedge funds scene, having shaved his head for charity
and played drums on stage during the industry’s annual Hedge Funds Rock fund-raiser. No doubt his profi le
has helped sales with the Australian retail investors who make up the bulk of the fi rm’s clients, but solid
performance has helped Basis gain a respectable international following too.
ADM Capital Robert Appleby Hong Kong Distressed
debt, special
situations
$2bn Galleus: 2.01% ADM was set up immediately after the 1998 Asian fi nancial crisis to buy up distressed securities in the
region, and prospered until last year, when write-downs of a couple of major investments led to performance
well below its 15% target. It runs a range of closed-end funds with the support of the Asian Development
Bank and last year it expanded into Europe, looking for distressed opportunities on the continent. Rarely for
a hedge fund it aims to invest “based on ecologically sound principles” - including naming its funds after
threatened fi sh species. Last year the partners set up a charity to support marine ecology, along with other
environmental causes and children.
Artradis Fund
Management
Richard Magides,
Stephen
Diggle
Singapore Relative value $1bn Barracuda:
8.7%
Artradis looks for ineffi cient pricing in Asian securities, giving it a market-neutral approach. It tends to be
long volatility, damping performance in the past year, although it emerged well from last May’s big correction,
when many hedge funds were hammered. Has just expanded into Russia with a fund run by Mr Diggle’s
brother.
LIM Advisors George Long Hong Kong Multi-strategy $750m Asia Arbitrage:
12.78%
LIM is one of the oldest Asian funds and has diversifi ed its range to include country-specifi c China and Japan
funds and long-only funds. It is not afraid to push the boundaries, launching the region’s fi rst property hedge
fund.
Platinum Asset
Management
Kerr Neilson Sydney Long-short
equity
Total inc longonly
A$22.2bn
($18.4bn)
International
Fund (A$):
6.5%
Platinum does not describe itself as a hedge fund, but most of its funds are hedged to some degree. The fi rm
- seeded by George Soros - is a hit with Australian retail investors, helped by strong performance, offbeat
advertising and a chatty style that includes online holiday snaps posted by its fund managers. But Mr Neilson’s
value approach and stock-picking skills also make him popular with international hedge fund investors.
Last year was tough for its fl agship thanks to an overly cautious approach and an unsuccessful bet on Japan,
but that has not stopped the group going ahead with plans to list.
Sparx Group Shuhei Abe Tokyo Multi-strategy Hedged:
Y543bn
($4.5bn) Total:
Y1,377bn
Asia’s biggest hedge fund manager has grand ambitions. Mr Abe listed the group on Jasdaq in 2001, 12
years after it set up, and has consolidated its lead in Asia by buying Hong Kong’s PMA Capital, the region’s
number two, last summer. It has moved away from its core long-short strategy with activist, private equity
and big long-only funds as well as setting up funds of hedge funds.
Tantallon
Capital
Nick Harbinson Singapore Long-short
equity
$1.1bn Tantallon fund:
12.99%
Named after a ruined castle in Scotland, Tantallon is one of the larger Asia-based hedge shops. The main
fund uses top-down themes to identify sectors for investments, with equal weight given to fundamental
corporate analysis for individual stocks. It also runs a fund focused on the fashionable Bric economies and an
Asian smaller companies fund.
Winnington
Capital
Kenneth Hung Hong Kong Long-short
equity
$300m Trophy: 366% Winnington has grown rapidly in the past couple of years thanks to its focus on greater China, increasing assets
by a third already this year. It has successfully ridden the bull market in Chinese shares, and weathered
the collapse in the local market at the end of February thanks to well-placed derivatives, which left it up
slightly for the month. Still, Trophy remains a very high-risk fund, as shown by its 26% fall during 2005, and
the company has just set up a lower volatility version. It also plans a property fund investing in China.

Story Material

Free Daily Hedge Fund Newsletter

Related to

Permanent Link: Hedge Fund Resource

Tags: Hedge Fund Resource

Richard C. Wilson's Blog