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Hedge funds are an advanced level portfolio of investments, containing a mix of leveraged derivatives, as well as long and short positions of domestic and international markets, based on advanced methodologies. These funds are intended for sophisticated high-risk, high-return investors.

This article looks at the top hedge fund firms, based on total assets under management (AUM), and ranks them in decreasing order. The challenge with hedge fund data is that most funds are privately owned and only clients are provided with access to detailed reports. Figures stated here are from official sources (company websites/reports) as available at the time of writing this article, with a few taken from other sources, including Institutional Investor's Alpha.

  1. Bridgewater Associates LP: According to its website, this Westport, Connecticut-based firm with approximately 1400 employees manages $150 billion in global investments spread across institutional clients, central banks and governments, corporate funds, and pension funds. It has $87.1 billion in hedge fund management, making it the largest hedge fund management firm.
  2. J.P. Morgan Asset Management is a division of the larger JPMorgan Chase & Co. (JPM). Hedge fund management is a part of JPM Asset Management, along with management of other asset classes. JPMorgan Chase has $2.4 trillion in overall assets under management as of December 2013, of which, the hedge fund Asset Management has AUM of $59 billion.
  3. Och-Ziff Capital Management Group LLC: Founded in 1994 and based in New York, Och-Ziff (OZM) has $ 47.1 billion AUM as of December 2014. As a hedge fund specialist, Och-Ziff has investments focused across “multi-strategy funds, credit funds, collateralized loan obligations (CLOs), real estate funds, equity funds and other alternative investment vehicles,” according to its website.
  4. Brevan Howard Asset Management LLP: Founded in 2002, Brevan Howard is a privately held firm based in London with global offices and around $40 billion hedge fund assets under management. It is the largest hedge fund in Europe for AUM. Its hedge fund business centers on multiple assets, including currencies and commodities, along with the usual equities, derivatives, and fixed-income securities. Its defined strategies are focused on short-term profit opportunities within an up to six-month timeframe, based on emerging economic trends.
  5. BlueCrest Capital Management: BlueCrest was founded in 2000 and has offices across the globe. It operates under two streams: alternate investment management and hedge fund management. Their hedge fund AUM are reported to be around $34.2 billion as of December 2013, making it among the top European and global hedge fund management firms.
  6. BlackRock: This New York-based firm with more than 11,000 employees is one of the largest asset management companies, having a diversified portfolio of financial services from savings to insurance to private equity and more. It has $4.32 trillion of AUM overall, with $31.323 billion in hedge fund management.
  7. AQR Capital Management LLC: Founded in 1998 in Greenwich, CT, AQR has total AUM of around $114.7 billion as of September 2014, of which $ 29.9 billion are in hedge fund management. Its investment style focuses on global investments in public equity, public futures and options, public bonds, private bonds, and over-the-counter derivatives.
  8. Lone Pine Capital LLC: Founded in 1997 in Greenwich, CT, Lone Pine Capital’s investment style combines fundamental analysis with a bottom-up approach, using both long and short approaches to invest in global public equity. Hedge fund AUM are reported to be $29 billion.
  9. Man Group plc: Listed on London Stock Exchange, the London-based Man Group, founded in 1783, has $28.3 billion AUM in hedge funds (out of total AUM of $57.7 billion) as of June 2014. Through its multiple money manager divisions, namely AHL (managed futures), GLG Partners (traditional, alternate, and hybrid investment management), FRM (hedge funds) and Man Numeric (quantitative asset management), it is one of the leading hedge fund management houses.
  10. Viking Global Investors: Greenwich, CT-based Viking Global was founded in 1999 and has hedge fund AUM of $27.1 billion.

The Bottom Line:

Hedge funds are usually privately held and data related to the funds are made accessible only to clients. Though many top hedge funds have managed to outperform other investment vehicles, they are best suited for high-risk, high-return investors. The list of top hedge fund firms keeps changing each year, indicating a high volatility in performance and in hedge fund AUM. Investors should practice caution while deciding on hedge fund investments, regardless of AUM size or other parameters.