With return levels industry-wide hovering at 5.4%, 2016 was a rough year for most hedge funds. In comparison, the S&P 500 returned 11.9%, meaning the average hedge fund trailed the market by a significant margin.
In a report by Business Insider, analysts suggest that poor performance and lingering high fees combined to drive money away from hedge funds in 2016, resulting in roughly $70 billion in lost assets due to withdrawals. This marked the largest decline for that reason since 2009. However, there are still some funds which were able to pull through and see success. Here are the top-ranked hedge funds from Institutional Investor's Alpha's 2017 Hedge Fund 100 list.
1. Bridgewater Associates
Bridgewater, the Connecticut-based fund of Ray Dalio, remains the largest fund in the world in terms of assets. The fund has $122 billion in assets under management, marking a 17% gain from the levels at the beginning of 2016 until the start of the new year. Dalio seems to have proven that the largest funds can still be highly profitable, and Bridgewater's stellar performance belies the fact that the industry is experiencing such crucial problems.
2. AQR Capital Management
Cliff Asness, the co-founder of AQR Capital Management, saw his fund start off the new year with assets under management of just under $70 billion. AQR is the largest hedge fund representing the quant fund group. According to Business Insider, this body of hedge funds, with its emphasis on computer models and automated research practices, has managed to bring in the most significant growth figures in the past year.
3. JPMorgan Asset Management
JPMorgan Asset Management, the hedge fund arm of the major bank, is headed up by CEO Mary Callahan Erdoes. This year, the fund began with $45 billion in AUM, enough to launch it into the third-place position on the list.
5. Renaissance Technologies
James Simons, the co-founder of Renaissance Technologies, propelled his fund to the fourth spot on the list. Renaissance is one of the oldest and most popular quant firms, and its strategy has paid off significantly in recent months.
The fund began last year in the 12th spot on the list, but thanks to its 42% asset growth year-over-year, Renaissance came in this year in the fourth spot, with $42 billion in AUM. Earlier this year, news broke that Renaissance was poised to create multiple new billionaires based on its performance. (See also: Renaissance Technologies May Be Creating Even More Billionaires.)
5. Two Sigma
Rounding out the top five in this year's list is Two Sigma, another major player in the quant fund world. Thanks to its innovative technology, Two Sigma secured the fifth spot in this year's list of largest hedge funds by asset. Two Sigma began the year with $38.9 billion in assets under management.