The 10 Largest Hedge Funds in America

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5. Baupost Group
> Assets under management: $25.0 billion
> Year founded: 1983
> Location: Boston

Baupost is said to be a value fund, but its strategies can use debt and equity, and the fund often has a substantial position in cash rather than being long or short. Fund manager Seth Korman’s holdings at the end of 2011 showed some $3.336 billion in U.S. equities. Along with over a $500 million stake in BP PLC (NYSE: BP), Baupost’s full holdings are here.

4. BlackRock
> Assets under management: $25.5 billion
> Year founded: 1988
> Location: New York

BlackRock’s (NYSE: BLK) $25.5 billion in assets under management include several opportunistic funds that are closed to new capital and have fixed terminal dates, according to the Absolute Return data. All in all, it manages multiple asset classes through various absolute return strategies around the globe.

Read Also: Warren Buffett’s Top Stock Holdings

3. Och-Ziff Capital Management Group
> Assets under management: $28.4 billion
> Year founded: 1994
> Location: New York

Och-Ziff (NYSE: OZM) was founded in 1994 by Daniel Och. Strategies are varied, but the primary strategies are convertible and derivative arbitrage, credit (high yield and distressed), long/short equity special situations, merger arbitrage, private investments and structured credit via mortgage-backed and asset-backed securities. As of December 31, 2011, the firm had 434 employees worldwide. The flagship OZ Master Fund is a global, multistrategy fund that invests in strategies through North America, Europe, Asia and elsewhere in the world. Net annualized returns for the flagship fund are as follows: -0.48% in 2011, 9.96% past three years and 4.50% past five years (page 7 of annual report).

2. JP Morgan Asset Management
> Assets under management: $45.0 billion
> Year founded: 1984
> Location: New York

This fund group, from one of the healthiest banks in the world, has multiple strategies crossing multiple asset classes via a fund of funds approach as well as through its direct hedge funds under Highbridge Capital Management. Highbridge was actually an acquisition dating in part back to 2004. It employed more than 300 workers and managed $21 billion as of mid-2010, per its website. Even when the asset managed by fund of funds alone are considered, it is enough to get the group into the top 10 in America. The Highbridge focus is based on arbitrage and absolute return strategies. Its most recent holdings can be seen here from Highbridge.

1. Bridgewater Associates
> Assets under management: $76.6 billion
> Year founded: 1975
> Location: Westport, Conn.

Bridgewater manages a total of $120 billion if you include assets not considered as a hedge fund, and it employs roughly 1,200 workers. The fund’s investment strategy is to take large macro-bets using currencies, commodities, bonds and other instruments. It has managed to have very impressive returns through time. The fund has also grown through gathering more assets from clients in recent years. In a Bloomberg video from Davos, Bridgewater’s co-CEO David McCormick discusses the firm being up 23% last year.

JON C. OGG

Sources: Absolute Return, DealBook, SEC, Bloomberg and others.