TCI, Citadel Steer Leading Hedge Fund Managers To Record $65B In Gains

Last year, sizable earnings at Sir Christopher Hohn's TCI and Ken Griffin's Citadel led the way as the top 20 best-performing hedge fund managers made some of their largest gains in over a decade. The list of managers, which also features Paul Singer of Elliott Management and Israel Englander of Millennium Management, represents gains of $65.4 billion—up from $63.5 billion in 2020 and constituting the biggest annual gain since Edmond de Rothschild Group began compiling data in 2010. On the other hand, returns for the industry as a whole were not commensurate with the rally in global stock markets.

Noticeably better returns at a few of the top funds are a crucial win in what has been a tough year for hedge funds. Though their early pandemic-era performance was a bright spot in a dark time, the market's tumultuous 2021 kept excitement at bay. Rick Sopher, Chair of LCH Investments, said, “Hedge fund returns in 2021 varied greatly," and added that the overall industry’s gains “were quite modest, especially when compared with the strong performance of equity indices.”

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According to data provider HFR, hedge funds gained 10.3% on average, which lags far behind the 20% increase in the MSCI World index and the 27% rise in the S&P 500. Consistent underperformance has driven a number of investors out of the sector and into private equity and private debt markets.