The world's 20 most successful hedge fund firms generated their biggest profits on record last year on the back of a stock market surge, making a combined $67bn for investors, according to a report by Reuters citing data from LCH Investments.

Last year's returns beat the previous record of $65bn set in 2021 and were almost triple the figure recorded in 2022.

According to LCH, which calculates which managers are most successful based on cumulative dollar profits generated for investors, net of fees, since inception, activist fund TCI Fund Management led the way in 2023 with gains of $12.9bn after fees, as the Top 20 firms recorded an average gain of 10.5%, ahead of the overall industry average of 6.4%.

In terms of life-time gains, multi-strats Citadel, Millennium Management and DE Shaw were the top three performers. Despite accounting for only 4.6% of the industry's assets under management, the trio have generated 38.3% of the entire industry's returns over the past three years, according to LCH.