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Big five hedge funds have doubled US stock market footprint since 2014, says Goldman

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A Goldman Sachs client note has revealed that the world’s five largest hedge fund firms, have doubled the size of their holdings in US stocks through leverage and trading positions since 2014, according to a report by Reuters.

The note, released on 8 September, says the largest multi-manager funds, which employ a diverse set of trading strategies under one roof, now hold almost a third of the US stock traded by the entire hedge fund industry, up by about 3% from last year.

According to the note, while their portion of total hedge fund industry AUM is only 9%, their impact on the market is much larger because of the higher levels of leverage they employ.

The size of assets held by the biggest hedge funds has also outstripped the rest of the industry over the last 12 months, growing by around 21% versus 9%, according to the note.

But the note also shows returns have become harder to come by than assets, with multi-managers recording an average return of 1.4% in the first half of 2023, the first time that Goldman has recorded performance lower than the risk-free rate provided by core government bonds.


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