The world’s 20 top performing hedge fund managers earned a record $65.4bn ($48bn) profit for their clients in 2021 after bets placed on rising stock markets paid off.
The biggest winner was TCI, the fund run by British billionaire Sir Chris Hohn, which made a gain of $9.5bn last year, according to the annual rankings by LCH Investments.
TCI, which manages about $44bn of assets and is known in the City and on Wall Street as one of the most aggressive activist investors, made a gain of 23.3% in 2021. TCI, which stands for the Children’s Investment fund, has made total gains of $36.5bn since it was set up in 2003.
Hohn, a philanthropist and climate crisis activist, paid himself $152m last year, less than a third of the $475m he received the previous year.
He has pumped more than £4bn into his personal children’s charity and in recent years has taken on a second cause: the climate crisis, promising to use TCI’s $44bn of investments to “force change on companies who refuse to take their environmental emissions seriously”.
Hohn is the single biggest individual donor to Extinction Rebellion (XR), which has staged high-profile climate protests around the world. “Humanity is aggressively destroying the world with climate change and there is an urgent need for us all to wake up to this fact,” he said when he was revealed as XR’s main funder.
The top 20 hedge funds returned 10.5% on average, making total gains of $65.4bn, up from $63.5bn and the most since LCH started collating the data in 2010.
“The net profit generated by the top 20 managers for investors was the highest ever,” Rick Sopher, the chair of LCH said.
“While hedge funds have not been the best performers of the past decade, they may become more useful if the market environment changes, which it inevitably will,” he added. “Equity markets have been soaring and bond markets are precarious, so the risks of traditional equity and bond investors losing money in the future are high and rising.”
The second-best performing fund was Citadel, a US fund run by Ken Griffin, the world’s 54th wealthiest person with an estimated personal fortune of $27.5bn. Last year, Citadel made $8.2bn, a 26% return.
In 2019 Griffin bought a Grade II* Georgian mansion within sight of Buckingham Palace for almost £100m. He purchased 3 Carlton Gardens, which overlooks the Mall and St James’s Park in central London, for £95m.
He owns string of luxury properties across the world, including the most expensive ever sold in New York, Chicago and Miami. Last year he bought a four-level penthouse at the top of Chicago’s No 9 Walton apartment complex for $58.8m. When it is fitted out the apartment will feature a private pool and several balconies.
Griffin mostly lives and works in Chicago, where Citadel is based, and also owns a condominium that occupies the whole of the 37th floor of the city’s Waldorf Astoria hotel.