New York is the indisputable capital of the hedge fund world. Despite pretensions to apotheosis from London and even Greenwich, Connecticut, the Empire city still rules the world of international finance on almost all fronts.
With so many hedge funds in such a small area, it’s difficult to put together a list of those worth paying attention to. Here’s a look at 8 of the top funds in New York. They may not be the biggest hedge funds in absolute terms, but they are notable at the same time.
1. Och Ziff
Founded to keep track of the wealth of the illustrious Ziff family, Och Ziff is now publicly traded and in charge of $47.5 billion in client money. $29.9 billion of that as invested in the hedge fund products that made the company famous according to its most recent earnings report.
The firm did incredibly well in 2014, growing assets by more than 20%, though its returns were disappointing to some investors. Och Ziff still leads the hedge fund world on a lot of fronts and it’s necessary to pay attention to the company’s reports in order to get a feel for the industry as a whole.
2. JPMorgan Asset Management
The wealth management arm of one of the world’s most important banks, JPMorgan Asset Management is generally up there as one of the biggest controllers of hedge fund money in the entire world. With $72.5 billion of its total assets of $1.7 trillion invested in hedge funds, the group’s overall exposure may seem small.
It’s worth noting however that 3.6 cent of every single hedge fund dollar is invested in JPMorgan Asset Management. Whatever JPMorgan does goes, and the company, unlike some of the other major hedge funds, releases some information to the public making it a valuable source of data on the industry as a whole.
3. Paulson & Co.
The heat of financial crisis made John Paulson what he is today: the catalyst behind the single biggest manager-driven hedge fund this side of Greenwich. Paulson & Co. has had a rough couple of years, investing in gold and banks at just the wrong times. The firm still has around $22 billion in assets under management, however, and Paulson is still one of the most listened to voices on Wall Street.
4. Highbridge Capital Management
With $26 billion in assets under management, Highbridge Capital Management has been an incredible performer since it was founded in 1992 by Glenn Dubin and Henry Swieca. The firm was acquired by JPMorgan chase in 2009, but is rumored to be looking to end that relationship. Such a split would make for an interesting future for the company, and investors should pay attention.
5. Cerberus Capital Management
With $25 billion in assets under management across its products, Cerberus is a big player on Wall Street. Much of the company’s more famous operations take place through its private equity funds, with its most recent push coming in real estate. Cerberus appears to be becoming America’s landlord, buying up property across the country in an aim to collect the income stream off of rent.
6. D.E. Shaw & Co.
David E. Shaw put his firm together in 1988, and it’s spent the last three decades out-investing the vast majority of competitors, allowing it to survive through some of the greatest turmoil ever unleashed on financial markets.
The fund now has more than $30 billion in assets and continues to invest across a wide range of strategies, often focusing on smaller company acquisitions and plays on growth stocks. The firm is known for its use of a hybrid fundamental-quantitative analysis, and its impressive handling of opportunities in distressed assets.
7. Elliott Capital Management
One of the most interesting hedge funds you’re ever likely to hear of, Elliott Capital Management is currently involved in a legal battle with the government of Argentina over the country’s default in 2001. In the course of that argument, Elliot, which is run by Paul Singer, attempted to confiscate one of the country’s naval vessels and forced it to declare bankruptcy again in 2014.
8. BlackRock Advisors
The single biggest asset manager in the world with more than $4 trillion under its control, when BlackRock managers speak, the whole of Wall Street sits up to listen. The company has its fingers in absolutely everything that goes on on Wall Street, and its hedge fund offerings are no different.
BlackRock currently controls about 2.1% of the entire hedge fund industry, well behind the likes of JPMorgan, but still one of the most important voices on Wall Street.
Paul Shea is an experienced money, trading and investing writer who cut his teeth writing stock, investment and industry analysis and covering macroeconomics. Paul Shea work has been linked and quoted by MSNBC, BusinessWeek, Barrons, Zerohedge and The Blaze, and his work appears regularly on Google News and Google Finance, as well as other prominent news aggregators. He’s also written about the tech industry for the likes of Valuewalk and The Street. Paul is a senior contributor writer for TradersDNA and HedgeThink.