May 16, 2022 Last Updated 07:48 AM EDT

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Top 20 Hedge Funds Make Record-Breaking $63.5 billion in 2020

Jan 25, 2021 03:00 AM EST

Ray Dalio
(Photo : Handout / Handout/GETTY IMAGES) Ray Dalio, Bridgewater Associates on Centre Stage during day two of Web Summit 2018 at the Altice Arena on November 7, 2018 in Lisbon, Portugal. In 2018, mo

Despite the harrowing year of combatting virus and flattening COVID-19 infection curves, the world's 20 best-performing hedge funds actually performed so much better. They earned a record-breaking amount of  $63.5 billion in 2020 - the highest for the last 10 years. 

Top 20 Hedge Fund Earners Break Record in the Middle of Pandemic

Ray Dalio
(Photo : Handout / Handout/GETTY IMAGES)
Ray Dalio, Bridgewater Associates on Centre Stage during day two of Web Summit 2018 at the Altice Arena on November 7, 2018 in Lisbon, Portugal. In 2018, mo

According to the data presented by LCH investments, technology-oriented stocks are at the forefront of this record, because they allowed for a significant rebound from a sell-off triggered by the pandemic.

LCH Investments also showed that as a group, the most successful managers earned around 50% of the $127 billion that all hedge funds made in 2020. LCH Investments, an arm of a funds firm that monitors returns, is part of the Edmond de Rothschild group, as reported by Reuters

The record is made even more meaningful because it was not anticipated. The COVID-19 pandemic has triggered a massive stock market sell-off in March, killing large sectors of the economy and destroying millions of jobs.

And yet, the 20 best hedge funds earned so much more than what they did the previous year. In 2019, they as a group, made returns of only $59.3 billion. 

Conversely, 2020 is not as profitable as the previous year for hedge funds as a whole. Numbers would show that from 2019 to 2020, hedge fund earnings fall from $178 billion in 2019.

On average, the hedge fund returned 11.6% in 2020,  which is quite low, compared to the S&P 500 index' 16% gain, as seen in the Hedge Fund Research data,

"The net gains generated by the top 20 managers for their investors of $63.5 billion were the highest in a decade. In that sense, 2020 was the year of the hedge fund," Rick Sopher, LCH's chairman, claimed in an optimistic statement.

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Top 5 Best Performing Hedge Funds 

Last year's biggest earners include Chase Coleman's Tiger Global, which earned $10.4 billion, Israel Englander's Millennium, which earned $10.2 billion and Steve Mandel's Lone Pine with $9.1 billion.

Andreas Halvorsen's Viking Global Investors earned $7.0 billion and Ken Griffin's Citadel earned $6.2 billion, according to LCH data.

Ray Dalio's Bridgewater Associates, founded in 1975, still held on to its No.1 ranking right from the start. In 2020, the top ranker earned a total of $46.5 billion earned, over a half of the total earned by the top 20. 

George Soros' Soros Fund Management, which no longer manages money for outside clients, came in on the second spot. The 3rd, 4th, and 5th spots go to  Mandel, Griffin and D.E. Shaw. 

Others in the Top 20 include Chase Coleman's Tiger Global, Israel Englander's Millennium, Steve Mandel's Lone Pine, Andreas Halvorsen's Viking Global Investors, and Ken Griffin's Citadel earned $6.2 billion. 

Jim Simons' Renaissance Technologies, which is usually part of the these top hedge funds due to its Medallion portfolio returns, is booted out of the list in 2020.  The funds that Renaissance Technologies offers to outsiders fell between 20% and 30% in 2020. 

"Conditions favored man over machine and it was notable that Renaissance Technologies, a machine-driven manager, has dropped out of the top 20," the LCH chairman shared.

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