Hedge funds have lost some of their luster in recent years, with institutions preferring to pour money in Wall Street’s newer crazes for dependable returns like private credit, but the most successful firms in the old guard are still delivering steady gains for their limited partner investors.
The world’s top 20 hedge funds, ranked in order of estimated net gains since inception according to LCH Investments, cumulatively produced a record $93.7 billion in gains in 2024. Citadel, D.E. Shaw and Millennium Management remained the top three since inception and were also the top three performers in 2024 in particular, separating themselves further from the rest of the industry. While Ken Griffin’s Citadel remains comfortably in first place with $83 billion in gains since it was founded in 1990, D.E. Shaw, founded by billionaire David Shaw and now run by a seven-person executive committee, netted an estimated $11.1 billion in 2024 to edge out its rivals for the single year.
D.E. Shaw’s flagship Composite fund generated a reported 18% net return in 2024, and its Oculus fund focused on macro trading returned 36%. Citadel’s flagship Wellington fund and billionaire Israel Englander’s Millennium each returned 15%. LCH Investments notes that the top 20 managers collectively generated asset-weighted returns of 13.1% last year, trouncing the average hedge fund reflected the HFRI Asset Weighted Composite Index, which returned a meager 8.3%.
“In most cases these managers have been generating above average performance over several decades, reflecting the persistence of their superior returns,” Rick Sopher, chairman of LCH Investments and CEO of Edmond de Rothschild Capital Holdings, said in a press release.
Run-of-the-mill investors in stock index funds may roll their eyes at even the higher end of those figures after the S&P 500 gained 23%, following a 24% increase in 2023 that also beat most hedge funds. But the most successful hedge funds are built to provide safety even in market downturns. Citadel, D.E. Shaw and Millennium are multistrategy firms with thousands of employees divided into trading teams focused on several strategies like quant trading or macro and commodities themes. Their secrets are closely guarded, but they’ve managed remarkable consistency. All three posted positive double-digit returns in 2022, when the S&P 500 declined 19%, and Citadel’s annualized return since 1990 is approximately 19.5%, beating the S&P 500 by more than eight percentage points a year on average.
Citadel claimed the No. 1 position on LCH Investments’ annual list in 2023 from Bridgewater, Ray Dalio’s firm which has since slumped to fourth. Here is the full list of the top 20 hedge funds.
LCH Investments is a subsidiary of the Edmond de Rothschild Group and the investment advisor of Leveraged Capital Holdings, the world’s oldest fund of hedge funds which has returned 9.8% annually since 1969. LCH has released this list each year since 2010 based on meetings with founders and other confidential sources, choosing to recognize raw cash gains rather than annualized return metrics that are often skewed by higher returns when funds were smaller.
All 19 active firms in the top 20 generated at least $1.2 billion in gains in 2024—George Soros remains eighth overall after generating $43.8 billion for investors over four decades, but closed his hedge fund in 2011 and is no longer tracked year after year. Stock-picking hedge funds like Christopher Hohn’s London-based Children’s Investment Fund and Steve Mandel’s Lone Pine Capital had good years. Hohn’s portfolio of large concentrated stakes in stocks like General Electric, Moody’s, Microsoft and Visa produced another $8.2 billion in gains in 2024 after earning $13 billion in 2023. That performance moved him up another spot to sixth on the list with $49.5 billion in gains since inception, and he’s done it in much less time than most of his peers since launching his fund in 2004.
Another British hedge fund, Marshall Wace, is new to the list, slotting in at 16th with $29.5 billion in gains since inception and $4.5 billion in 2024. Led by Paul Marshall and Ian Wace, the firm manages $69 billion in assets and is 40% owned by American private equity giant KKR, which partnered with them in 2015.
For the first time, LCH Investments also published some aggregate data on fees, revealing that as a whole hedge fund managers keep almost as much for themselves as they produce for their investors. The firm estimates that all hedge funds have recorded $3.7 trillion in gross gains since 1969 but $1.9 trillion in net gains—48% of the gross gains were wiped out by steep management and performance fees. The top 20 funds are responsible for $854 billion in net gains, or 44% of the industry-wide total.
Sopher says early investors like LCH around 1969 typically paid a 1% management fee and a 20% performance fee, but fixed management fees began to increase to 2% or more in the 2000s. In fact, since 2000s, fees account for a slight majority of gross gains, in part because many hedge funds suffered significant losses around the 2008 crisis to wipe out gains but could keep prior years’ performance fees in their pockets.
The most successful hedge funds have of course given investors more bang for their buck, despite charging higher than average fees in most cases. LCH Investments estimates managers in the top 20 have kept 34% of gross gains since inception as fee earnings, amounting to around $450 billion in fees. It’s no wonder then that the hedge fund founders on the list have stacked up some $185 billion in personal fortunes, according to Forbes estimates, led by Griffin at $43 billion as of last September.
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