Top US Hedge Fund Assets Surpass USD1.6 Trillion

by Carla Johnson, Investors Offshore.com

28 March 2008

As of January 1st, 2008, the biggest US hedge fund firms managed combined assets of USD1.605 trillion, according to the biannual hedge fund survey published by Absolute Return magazine, a unit of HedgeFund Intelligence.

The report, published in Absolute Return’s March issue, found that assets of the biggest US hedge funds in 2007 increased 34% over the prior year’s total – despite three of the 10 largest hedge fund firms losing USD24bn in assets during the second half of the year.

Assets of the 262 hedge fund firms that manage USD1bn or more, known as the Absolute Return Billion Dollar Club, increased by USD407bn, or 34%. That represents USD60bn more than their gain in 2006, and is greater than any one-year increase since Absolute Return began tracking industry assets in 2003.

During the second half of the year, however, fund assets increased by only 10%, the smallest half-year increase since the survey began.

JPMorgan (including JPMorgan Asset Management and Highbridge Capital Management) remains the biggest US hedge fund manager, with USD44.7bn. While that number is down from JPMorgan’s USD56.2bn total last July, the firm’s assets are significantly higher than the USD34bn held last January.

JPMorgan’s assets are USD8.7bn higher than the second- and third-place firms, Bridgewater Associates and Farallon Capital Management – both of which now manage USD36bn.

Rounding out the top five, Renaissance Technologies rose to fourth place with USD34bn, a 41.67% increase, while Och-Ziff Capital Management rose one spot to fifth place, with USD33.2bn, an increase of 58.10%.

The biggest winner was Paulson & Co., which joined the top 10 for the first time after assets increased nearly 306% during 2007 to end the year at USD29bn.

The biggest loser of 2007 was Goldman Sachs Asset Management, which fell to seventh place from second, as assets dropped 27% in the second half to end the year at USD29.20bn. Since July, Goldman, JPMorgan and D.E. Shaw all lost hedge fund assets. D.E. Shaw fell to sixth place, from third.

According to its compilers, the Absolute Return Billion Dollar Club is the only survey of US hedge fund assets that whenever possible focuses on the aggregation of January 1st data, which includes the most recent redemptions and allocations, thereby making the survey more current and accurate than those focusing on December 31st numbers.

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