Main Players in Hedge Funds

Page 1

Main Players in Hedge Funds

• Educational Presentation #10 – Hedge Funds

• 14.03.2025

• Property of the ESCP Alternative Investments Society

• Sources: Bloomberg, Aurum, FT, Hedgeweek, Hedgefollow, WSJ, Company Websites

Page 2

Section I: Introduction

Page 3

I: Introduction

L/S and Macro

L/S Equity:

• Long/short equity strategy profits from mispriced stocks by taking long positions in undervalued stocks and short positions in overvalued stocks • Gains are made from rising stock prices (long) and falling stock prices (short), allowing flexibility in bull and bear markets • Success is measured by alpha (excess returns) and beta (market correlation) to assess risk-adjusted performance

Global Macro:

• Global macro strategy leverages macroeconomic trends to make investment decisions across currencies, commodities, bonds, and equities • Investment decisions are based on economic indicators (e.g., GDP, inflation, interest rates) using complex econometric models to forecast market shifts • The strategy profits from global political/economic events, offering diversification and volatility management by capitalizing on price swings from events like geopolitical tensions and central bank policies

Source: Aurum.com

Page 4

I: Introduction

Event-Driven and Quant

Event-Driven:

• Profits from price movements linked to corporate events like mergers, acquisitions, and restructurings • Includes merger arbitrage (betting on deal spreads), distressed securities (investing in struggling firms), and activist investing • Success depends on deal completion, market conditions, and company recoveries, with returns driven by outcomes rather market movements

Quantitative:

• Quant funds use mathematical models and statistical analysis to identify market inefficiencies across asset classes • Trades are executed using automated algorithms, optimizing timing and minimizing human bias • Strategies rely on risk management models, with success measured by alpha, Sharpe ratio (risk-adjusted returns), and maximum drawdown

Source: Aurum.com

Page 5

I: Introduction

Compared Performance

Compared Performance:

• L/S Equity had the highest 1-year returns but weaker 3- and 5-year performance with higher shortterm volatility • Macro and Event-Driven funds delivered steady returns across all periods, while Quant slightly lagged over longer timeframes • Multi-Strategy has led since 2008, gaining AUM and delivering stable returns through diversification

Source: Aurum.com

Page 6

Section II: Multi Strategy / L/S Equity

Page 7

II: Multi Strategy / L/S

Citadel

Kenneth C. Griffin (Founder & CEO)

• BA from Harvard in Economics

• Founded: 1990

• Founded Citadel in 1990

• Founder: Kenneth C. Griffin

Pablo Salame (Co-CIO)

• HQ: Miami, US

• BS from Brown in Applied Mathematics

• Headcount: 2 800

• At Citadel since 2019

• AUM: $62.3bn

• Returns: 18% in 2024 (Equity Fund)

Gerald A. Beeson (COO)

• Strategy: Multi Strategy including L/S

• MBA from University of Chicago

• At Citadel since 1993

• In early 2025, Citadel has taken a £305m short position in GSK despite its £2bn buyback plan

• Citadel has earned approx. $8.1bn in 2023 for its investors, bringing their total profit to $74bn, the highest ever in the Hedge Fund industry

• Citadel’s market maker Citadel Securities earned a record trading revenue of $9.7bn in 2024

Page 8

II: Multi Strategy / L/S

Point72

Steve Cohen (Founder & CEO)

• BS from Wharton in Economics

• Founded: 2014 (previously S.A.C.)

• Founded Point72 in 2014

• Founder: Steven Cohen

Andrew B. Cohen (CIO)

• HQ: Stamford, US

• MBA from Wharton

• Headcount: 2 800

• At Point72 since 2014

• AUM: $36.9bn

• Returns: 19% in 2024

Gavin O‘Connor (COO)

• Strategy: Primary L/S

• MBA from NYU

• At Point72 since 2018

• In early 2025, Point72 raised its stake in Sphere Entertainment to 7.3%, showing confidence despite MSG Networks’ $829m debt talks

• Point72’s AI-focused fund gained 14% in three months, nearing $1.5bn in assets and set to close to new investors by April 2025

• Plans to return up to $5bn to investors in 2025 after a 19% gain, while shifting some costs to clients

Page 9

II: Multi Strategy / L/S

Millennium

Israel Englander (Founder & CEO)

• BS from NYU in Finance

• Founded: 1989

• Founded Millennium in 1989

• Founder: Israel Englander

Ajay Nagpal (President & COO)

• HQ: New York City, US

• BA from Brown

• Headcount: 6 100

• At Millennium since 2013

• AUM: $74.7bn

• Returns: 15% in 2024

Justin Gmelich (Co-CIO)

• Strategy: Multi Strategy including L/S

• MBA from Columbia

• At Millennium since 2023

• In late 2024 BlackRock was in early talks to acquire a minority stake in Millennium, signalling its push into alternative investments

• In 2024 Millennium invested $3.3bn in two new trading teams led by two exceptional traders as part of its expansion strategy

Page 10

II: Multi Strategy / L/S

Tiger Global Management

Eric Lane (President & COO)

• BS from Wharton in Engineering

• Founded: 2001

• At Tiger Global since 2021

• Founder: Chase Coleman

Robert Fallon (Head of Trading)

• HQ: New York City, US

• MBA from Wharton

• Headcount: 266

• At Tiger Global since 2007

• AUM: $58.5bn

• Returns: 28.5% in 2023

Don Anderson (CIO)

• Strategy: L/S

• MBA from Bentley University

• At Tiger Global since 2022

• Tiger Global rebounded with a 28.5% gain in 2023, following losses of 56% and 7% in 2022 and 2021 respectively

• In 2023, Tiger Global’s VC fund posted an 18% paper loss as it slashed valuations for portfolio companies, including DuckDuckGo (-72%) and OpenSea (-94%)

Page 11

II: Multi Strategy / L/S

Viking

Andreas Halvorsen (Founder & CEO)

• MBA from Stanford

• Founded: 1999

• Founded Viking in 1999

• Founder: Andreas Halvorsen

Rose Shabet (COO)

• HQ: Greenwich, US

• MBA from Wharton

• Headcount: 275

• At Viking since 2008

• AUM: $51bn

• Returns: 21% in 2023

Justin Walsh (CIO)

• Strategy: L/S

• MBA from Harvard Business School

• At Viking since 2010

• Betting on its recovery, Viking acquired a $526m stake in Boeing in Q4 2024, while also doubling its JPMorgan position to $1.8bn

• In 2023, Viking has reopened its flagship L/S fund to new capital for the first time since 2011

Page 12

Section III: Macro Funds

Page 13

III: Macro Funds

Bridgewater Associates

Ray Dalio (Founder)

• MBA from Harvard Business School

• Founded: 1975

• Founded Bridgewater in 1975

• Founder: Ray Dalio

Nir Bar Dea (CEO)

• HQ: Westport, US

• MBA from Wharton

• Headcount: 1 500

• At Bridgewater since 2015

• AUM: $154bn

• Returns: 11% in 2024 (Pure Alpha fund)

Bob Prince (Co-CIO)

• Strategy: Multi Strategy including Global Macro

• MBA from University of Tulsa

• At Bridgewater since 1986

• Bridgewater increased its Tesla stake by $62m in Q4 2024 while reducing exposure to the Magnificent Seven tech stocks

• Bridgewater’s Pure Alpha fund gained 8.2% in January 2025, navigating AI stock sell-offs and US tariff uncertainties

• Cut workforce by 7% in January 2025

Page 14

III: Macro Funds

Brevan Howard

Alan Howard (Co-Founder)

• MS from Imperial in Engineering

• Founded: 2002

• Co-founded Brevan Howard in 2002

• Founder: Alan Howard

Aron Landy (CEO)

• HQ: Jersey, US

• PhD from Cambridge in Engineering

• Headcount: 1 000

• At Brevan Howard since 2003

• AUM: $35bn

• Returns: 9% 3-year annualized

Jonathan Hughes (CFO)

• Strategy: Global Macro

• MA from Oxford in Management and Economics

• At Brevan Howard since 2007

• Cut 7% of trading staff after underwhelming performance in 2024, focusing on cost-cutting and operational efficiency

• Brevan Howard’s Master Fund gained 5.12% in September 2024, marking its best monthly performance of 2024

Page 15

III: Macro Funds

Tudor Investment Corporation

Paul Tudor Jones II. (Founder & CIO)

• BA from University of Virginia

• Founded: 1980

• Founded Tudor in 1980

• Founder: Paul Tudor Jones II.

Clayton Otto (COO)

• HQ: Stamford, US

• BS from Wharton in Finance

• Headcount: 355

• At Tudor since 2000

• AUM: $63.6bn

• Returns: 0.1% 3-year annualized

Lorenzo Giorganni (Global Head of Research)

• Strategy: Global Macro

• PhD from UPenn in Economics

• At Tudor since 2013

• In Q4 2024, Tudor increased its holdings in the iShares Bitcoin Trust by 81%, adding approximately 3.6 million shares to its portfolio

• In Q3 2024, the firm expanded its position in NVIDIA by 400%, acquiring an additional 1,095,156 shares

Page 16

Section IV: Event-Driven Funds

Page 17

IV: Event-Driven Funds

Elliott Investment Management

Paul Singer (Founder, President & Co-CEO)

• JD from Harvard Law School

• Founded: 1977

• Founded Elliott in 1977

• Founder: Paul Singer

Jonathan Pollock (Co-CEO)

• HQ: Florida, US

• BA from Curry College in Management

• Headcount: 593

• At Elliott since 1989

• AUM: $72.7bn

• Returns: 16% 3-year annualized

Zion Shohet (COO)

• Strategy: Event-Driven / Activist

• JD from Harvard Law School

• At Elliott since 2015

• Elliott took a €670m short position in TotalEnergies in March 2025, following its push for BP divestments

• Holding a 5% stake in BP, Elliott is pushing for asset divestments and a leaner cost structure, sparking a battle with 48 institutional investors

• Elliott pressured Honeywell to break up their business, leading to the company’s decision in February 2025 to split its aerospace unit

Page 18

IV: Event-Driven Funds

Pershing Square

Bill Ackman (Founder & CEO)

• MBA from Harvard Business School

• Founded: 2004

• Founded Pershing Square in 2004

• Founder: Bill Ackman

Ben Hakim (President)

• HQ: New York City, US

• BS from Cornell

• Headcount: 30

• At Pershing Square since 2012

• AUM: $19bn

• Returns: 4% 3-year annualized

Michael Gonnella (CFO)

• Strategy: Event-Driven / Activist

• BS from Seton Hall University

• At Pershing Square since 2005

• Pershing Square acquired a $2.3bn stake in Uber in February 2025, citing strong management and growth potential in autonomous vehicles

• In late 2024, Pershing Square built a $2.6bn stake in Brookfield, signalling confidence in the company’s role in global infrastructure

• Sold 2.7% of its stake in UMG in 2025, raising $1.4 billion. UMG still remains the largest position in their portfolio with 17%

Page 19

IV: Event-Driven Funds

Third Point

Daniel S. Loeb (Founder & CEO)

• BA from Columbia in Economics

• Founded: 1995

• Founded Third Point in 1995

• Founder: Daniel S. Loeb

Josh Targoff (President)

• HQ: New York City, US

• JD from Yale Law School

• Headcount: 110

• At Third Point since 2008

• AUM: $18bn

• Returns: 24% in 2024

Ian Wallace (Co-Head of Credit)

• Strategy: Event-Driven

• BA from University of Washington in Management

• At Third Point since 2009

• Third Point’s flagship Offshore Fund gained 9.1% in Q4 2024, bringing its full-year return to 24.2%, driven by strong equities and credit

• In early 2025, Daniel Loeb urged SoHo House’s board to open its sale process to outside bidders, criticizing the existing offer as undervalued

• Third Point agreed to acquire credit fund manager AS Birch Grove, to expand its credit platform, particularly in CLOs and private credit

Page 20

Section V: Quant Funds

Page 21

V: Quant Funds

Renaissance Technologies

Jim Simons (Founder)

• PhD from Berkeley in Mathematics

• Founded: 1982

• Founded Renaissance in 1982

• Founder: Jim Simons

Peter Brown (Co-CEO)

• HQ: Greater New York, US

• BA from Harvard

• Headcount: 300

• At Renaissance since 1993

• AUM: $89bn

• Returns: 30% in 2024 (Medallion Fund)

Mark Silber (CFO)

• Strategy: Quant

• JD from NYU

• At Renaissance since 1983

• Renaissance’s Medallion Fund gained 30% in 2024, while its institutional funds returned 22.7% and 15.6%

• Renaissance added over 1M GameStop shares in Q1 2024 and increased its AMC stake by 78%, benefiting from the meme stock surge

• The Medallion Fund posted a stunning 76% return in 2020, averaging 30% net since its creation

Page 22

V: Quant Funds

D.E. Shaw

David E. Shaw (Founder)

• PhD from Stanford

• Founded: 1988

• Founded D.E. Shaw in 1988

• Founder: David E. Shaw

Eddie Fishman (COO)

• HQ: New York City, US

• BS from Princeton

• Headcount: 2 500

• At D.E. Shaw since 1995

• AUM: $65bn

• Returns: 36% in 2024 (Oculus Fund)

Anne Dinning (Chair of the Executive Committee)

• Strategy: Multi Strategy including Quant

• PhD from NYU in Computer Science

• At D.E. Shaw since 1990

• D.E. Shaw raised $1bn for its Alkali VI fund, focused on corporate and structured debt, bringing total Alkali capital to $3.9bn

• In late 2024, D.E. Shaw took a €102m short position on Bayer following a sharp drop in the company’s stock after weak earnings and CEO warnings

Page 23

V: Quant Funds

Two Sigma Investments

David Siegel (Co-Founder)

• PhD from MIT in Computer Science

• Founded: 2001

• Co-founded Two Sigma in 2001

• Founder: John Overdeck, David Siegel, Mark Pickard

Scott Hoffman (Co-CEO)

• HQ: New York City, US

• JD from NYU

• Headcount: 2 000

• At Two Sigma since 2023

• AUM: $60bn

• Returns: 10% in 2024 (Spectrum Fund)

Carter Lyons (Co-CEO)

• Strategy: Multi Strategy including Quant

• BS from Lehigh University

• At Two Sigma since 2011

• Two Sigma is launching a real estate fund to raise external capital, focusing on housing, industrial properties, and select commercial assets

• Two Sigma is negotiating a $100m settlement with the SEC over trading misconduct related to unauthorized changes in trading models by a former employee in 2024