A hedge fund is a poolꦅ of money from ♚many investors that is actively invested in a broad range of assets. The hedge fund manager is given wide latitude in deploying money and may use risky strategies such as leveraged derivatives and short-selling to earn a return that outperforms the broader market.

The potential for risk-taking sets hedge funds apart from traditional mutual funds. That's why hedge funds are classified as "alternative investments." That's also why they have high minimum investments that make them available only to 澳洲幸运5官方开奖结果体彩网:high-net-worth individuals, pension funds, and institutional investors.

Hedge funds are not subject to the same regulations as mutual funds and may not be required to file reports with the U.S. Securities and Exchange Commission (SEC).

Below is our analysis of the 10 hedge fund firms that dominate the space, based on total 澳洲幸运5官方开奖结果体彩网:assets under management (AUM).

1. Citadel

Citadel is based in Miami and focuses on five strategies. These are (1) commodities, (2) credit and convertibles, (3) equities, (4) global fixed income and macro, and (5) global quantitative strategies.

In 1986, founder Kenneth Griffin began trading from his dorm room as a 19-year-old sophomore at Harvard University. He founded Citadel in 1990 and is currently the CEO and Co-Chief Investment Officer.

As of Aug. 29th, 2024, Citadel had $397 billion in assets under management.

2. Bridgewater Associates

Bridgewater Associates is based in Westport, Conn., and provides services to pension funds, foreign governments, central banks, 澳洲幸运5官方开奖结果体彩网:university endowments, ch𝐆aritable foundations, and other institutional investors.

Ray Dalio founded the firm in 1975 from his two-bedroom New York apartment and now serves as Bridgewater's CIO mentor. Nir Bar Dea is the firm's chief executive officer.

As of March 29, 2024, the firm had $171.7 billion under management.

3. AQR Capital Management

AQR Capital Management is based in Greenwich, Conn., and uses 澳洲幸运5官方开奖结果体彩网:quantitative analysis to develop its strategies focused on equities and alternatives. The firm offers its strategies via investment vehicles and registered funds.

Cliff Asness founded the company along with partners John Liew, Rob🔯ert Krail, and David Kabiller. The four had worked togethꦿer on a hedge fund at Goldman Sachs.

AQR launched its Absolute Return fund in 1998.

As of Aug. 28th, 2024, AQR had $132.5 billion under management.

4. D.E. Shaw

D.E. Shaw was founded in New York City in 1988. The firm's founder, David E. Shaw, earned his Ph.D. at Stanford and was on the faculty of the Computer Science Department at Columbia University before starting D.E. Shaw.

While still involved in strategic decisions, his primary role now is chief scientist.

The firm's systematic strategies are quant-based and focus on alternative investments and long-oriented investments.

As of Aug. 9th, 2024, D.E. Shaw had $120 billion under management.

5. Renaissance Technologies

Renaissance Technologies is a New York-based quantitative hedge fund that uses mathematical and statistical methods to uncover technical indicators that drive its automated trading strategies. Renaissance applies these strategies to U.S. and international equities, debt instruments, 澳洲幸运5官方开奖结果体彩网:futures contracts, 澳洲幸运5官方开奖结果体彩网:forward contracts, and 澳洲幸运5官方开奖结果体彩网:foreign exchange.

Mathematician Jim Simons founded Renaissance Technologies in 1982. At the time o🌊f his death in May 2024, his net worth was approximately $31.4 billion.

Peter Brown, also a mathematician, is the current chief executive.

As of Aug. 6th, 2024, the firm had $89 billion in assets under management.

6. Two Sigma Investments

Two Sigma Investments is based in New York and was founded by John Overdeck and David Siegel in 2001. The company uses quantitative analysis to build mathematical strategies that rely on historical price patterns and other data.

As of Aug. 7th, 2024, Two Sigma Investments had $83.9 billion under management.

7. Elliott Investment Management

Elliot Investment Management has a multi-strategy trading approach focused on equities, private equity, private credit, distressed securities, non-distressed debt, real estate, and commodities.

In August 2019, Elliot acquired book retailer Barnes & Noble. It had earlier acquiredღ British bookseller Waterstones.

The company is based in New York and was founded by Paul Singer in 1977.

As of June 30th, 2024, Elliot had $69.7 billion in assets under management.

8. Farallon Capital Management

Farallon was established in 1986 by Thomas Steyer with a focus on merger arbitrage. Its investment strategies include credit investments, long/short equity, merger arbitrage, risk arbitrage, real estate, and direct investments.

As of June 10th, 2024, Farallon had $42.6 billion under management.

9. Man Group Limited

This British hedge fund manager has more than 230 years of trading experience. It started in 1783 as a sugar cooperage and then became an exclusive supplier of rum to the Royal Navy. It later got into the coffee and cocoa trading business.

As of Sept. 9th, 2024, Man had $36 billion in assets under management.

10. Ruffer Investment Company

Ruffer was founded in 1994 in the U.K. The fund employs several strategies including total return, diversified return, and total return international.

As of July 19th, 2024, Ruffer had $27 billion under management.

The Bottom Line

Hedge funds seek to employ unique strategies with the goal of making greater returns than the market benchmarksꦛ or standard investment strategies. Hedge funds use unique strategies, some of them quite risky, and charge a high price for doing so.

Hedge funds are not created for the average investor but are rather geared toward institutions and high-net-worth individuals.