J.P. Morgan tops rankings of largest hedge fund managers

Ranking of the world's largest hedge fund managers illustrates the ravages the financial crisis wreaked on firms in the past two years

Largest hedge fund managers
(in $ billions as of Dec. 31, 2009)
1. J.P. Morgan $53.5

2. Bridgewater Associates $43.6
3. Paulson & Co. $32.0
4. Brevan Howard $27.0
5. Soros Fund Mgmt. $27.0
6. Man Group $25.3
7. Och-Ziff Capital Mgmt. Group $23.1
8. D.E. Shaw Group $23.0
9. BlackRock (BGI) $21.0
10. Farallon Capital Mgmt. $20.7
11. Baupost Group $20.0
12. Goldman Sachs Asset Mgmt. $17.8
13. BlueCrest Capital Mgmt. $17.3
14. Canyon Partners $17.0
15. Landsdowne Partners $15.0
16. Renaissance Technologies $15.0
17. Fortress Investment Group $13.8
18. Moore Capital Mgmt. $12.4
19. Viking Global Investors $12.4
20. Citadel Investment Group $12.2
21. SAC Capital Partners $12.0
22. GLG Partners $11.5
23. Tudor Investment $10.0

24. Total $482.6B

Pensions & Investments' list of the world's largest hedge fund firms — those with at least $20 billion as of Dec. 31 — shows that assets managed by the 11 companies totaled $316.2 billion, virtually the same as the $316 billion managed by the 10 hedge fund managers that made P&I's last ranking, based on data as of Dec. 31, 2007.
The flat growth disguises what clearly was a period of intense turmoil for many hedge fund managers, some of which were rocked by performance woes in the last months of 2008 and first few months of 2009, as well as by client redemptions.
The result is that the composition of the list of the hedge fund managers with more than $20 billion under management changed significantly:
•Hedge fund assets of three prominent firms — Goldman Sachs Asset Management, Renaissance Technologies Corp. and Citadel Investment Group — fell below the $20 billion cutoff, dropping the three from the ranking.
•Four hedge fund companies — institutionally-oriented Brevan Howard Asset Management LLP and Baupost Group LLC, as well as retail-focused Soros Fund Management LLC and Man Group PLC — joined P&I's list.
•In addition to the three firms that left the top manager list, three others remained above the $20 billion mark despite suffering asset declines ranging from 30% to 43%. The collective decline of these six managers over the two-year period was $74 billion.
Holding its No. 1 ranking on the latest list was J.P. Morgan, which managed $53.5 billion in hedge funds as of Dec. 31 — $32.5 billion by J.P. Morgan Asset Management and $21 billion by Highbridge Capital Management LLC. This is an increase of 18.9% from J.P. Morgan's year-end 2007 total of $45 billion.
Bridgewater Associates Inc. remained in second place, with hedge fund assets of $43.6 billion as of Dec. 31. Bridgewater was among the hedge fund managers that showed healthy growth during the period, rising 21%.
Paulson & Co. Inc. increased assets 10% to end 2009 with $32 billion, pushing the firm up to third from eighth.
Filling the next three spots on the list are the three new firms: Brevan Howard and Soros, each with $27 billion; and Man Group, with $25.3 billion.
Paulson's elevation in P&I's ranking and the addition of the three new firms resulted from asset declines of the five managers that had filled the third through seventh spots on the 2007 list.
•Farallon Capital Management LLC experienced an asset decline of 42.5% to end 2009 with $20.7 billion, to rank 10th in the current ranking.
•Assets managed in hedge funds by Och-Ziff Capital Management Group LLC dropped 30.2% to $23.1 billion, moving the firm into seventh place.
•D.E. Shaw Group, which had held the fourth spot, slipped to eighth with an asset decline of 30.3% to $23 billion as of Jan. 1, the date provided by the firm.
•Formerly in sixth place, Goldman Sachs' hedge fund assets declined 45.2% to $17.8 billion at year-end 2009, dropping the firm from the ranking. RenTech's hedge fund assets fell 52.2% to $15 billion, moving it out of the ranking after having been seventh in 2007.
In the ninth slot is BlackRock Inc., which managed $21 billion in hedge funds as of Dec. 31. BlackRock's presence is largely because of its acquisition last year of Barclays Global Investors Inc., which ranked ninth on the 2007 list with $20 billion.
Citadel Investment Group held the 10th position in the 2007 ranking with $20 billion of hedge fund assets, but with assets totaling $12.2 billion of as Dec. 31, it fell off the list.
The fourth new entrant on P&I's list, Baupost Group, just made the cut with $20 billion under management as of Sept. 30, the most recent date for which data are available from an industry source.
P&I also analyzed, where possible, how much each of the largest managers managed for institutional investors, including pension funds, endowments, sovereign wealth funds and institutionally oriented hedge funds-of-funds managers.
Collectively, assets managed for institutional investors by the 11 largest firms declined 22% to $151 billion or about half of total hedge fund assets as of Dec. 31, down from $194.9 billion or 62% of total assets two years earlier.
Bridgewater tops the hedge fund manager list sorted by institutional assets. All of Bridgewater's $43.6 billion is managed for institutions.
In terms of institutional assets, Paulson & Co. follows with $21.8 billion (68%); Brevan Howard, $21.6 billion (80%); D.E. Shaw, $19.1 billion (83%); BlackRock, $17.9 billion (85%); Och-Ziff Capital, $17.6 billion (76%); and Man Group, $7.8 billion (31%).