2018 was generally a miserable year for hedge funds as extreme market volatility led to big losses, a string of redemptions and even job cuts. Quant fund AQR Capital Management acknowledged that it will be cutting “a low single-digit percentage” of its workforce following its worst year since the crisis. Balyasny Asset Management is cutting at least 125 people, accounting for about one-fifth of its total headcount. Meanwhile, David Einhorn’s Greenlight Capital was down 34% in 2018 and has seen its assets under management cut in half in less than a year. Roughly 40% of funds tracked by Preqin were down more than 5% last year.
All that said, the pain felt across the industry wasn’t shared by all. In fact, some of the biggest names quietly posted solid gains in 2018, proving why they’ve been around for so long. The top 20 hedge fund managers ranked by total gains since their launch year combined to return 23.2% in 2018, according to new analysis by Bloomberg. The other 1,110 managers included in the research combined to lose 41%. If you want a new job at a hedge fund in 2019, those included in the chart below – established names that avoided losses last year – are a good start.
Ray Dalio’s Bridgewater Associates leads the list of best-performing hedge funds among the top 20 identified by Bloomberg. Due to its typically high turnover rates that stem from its culture of “radical transparency,” Bridgewater is seemingly always hiring. Citadel reportedly let go of a stock-picking team late last year, yet its equities arm is said to have added 50 investment professionals in 2018.
Meanwhile, Millennium Management added 300 people last year, more than half of whom were classified broadly as "investment staff." Point72 has been actively adding quants, building up its macro team and growing its Point72 Academy to increase headcount at the junior level; Brevan Howard is focusing on artificial intelligence and machine learning. Then there’s Two Sigma and D.E. Shaw, two quant funds that are bringing out plenty of student hires.
It’s likely not a coincidence then that five of the eight hedge funds in the chart below are among the top 10 payers in the industry, with Citadel and D.E. Shaw leading the way.
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