TCI Fund Management, the London-based hedge fund headed by Chris Hohn, has set a new industry record after the firm generated an estimated $18.9bn in trading gains last year, overtaking the previous high set by Citadel in 2022, according to a report by Bloomberg.
The performance came amid strong equity markets and heightened global volatility, which helped the hedge fund industry deliver an estimated $543bn in total profits for the year – the highest level on record, according to figures from Edmond de Rothschild.
TCI’s gains surpassed both Ken Griffin’s Citadel record and the $15bn generated by John Paulson in 2007 from his subprime mortgage trade, long regarded as one of the most profitable bets in hedge fund history.
Hohn’s equity-focused strategy benefited from strong performances in its largest holdings, including aerospace groups General Electric and Safran, which rose 86% and 42% respectively over the year, including dividends.
Bridgewater Associates recorded the second-largest trading profit, adding an estimated $15.6bn. Collectively, the 20 biggest hedge fund managers generated $115.8bn, outperforming smaller peers on an asset-weighted basis, the study showed.
Market conditions proved supportive across strategies, with equities, macro and multi-manager platforms all finding opportunities. Industry participants pointed to volatility driven by artificial intelligence enthusiasm, geopolitical tensions and uncertainty around interest rates as key contributors to performance.
Measured on a more traditional basis, the roughly $5tn hedge fund industry posted its strongest annual returns since 2009, with gains of around 12.6%, according to Hedge Fund Research. Since inception, Edmond de Rothschild estimates hedge funds have produced approximately $2.4tn in cumulative profits, with the top 20 managers accounting for more than 40% of that total.
