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How Did The World’s Largest Hedge Funds Get Started?

The American hedge fund industry has over $2.7 trillion assets under management and comprises over 3600 funds.

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How Did The World’s Largest Hedge Funds Get Started?

Did you know the very first hedge fund was launched all the way back in 1949?

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Known as the ‘father of the hedge fund industry’, Alfred Winslow Jones created a fund through his company A.W. Jones & Co. After raising $100,000 from family and friends, he deployed the winning strategy that we know today as the long/short equities model and the world’s first hedge fund was born.

Today there are thousands of active hedge funds around the world with over $4 trillion in assets under management, with the top 20 funds earning more than $65 billion last year.

We checked out 7 of 2022’s best performing hedge funds to find out how they got started:

#1 Citadel

In 1987 Boston, Kenneth C. Griffin wanted to get regular stock quotes in real-time. He decided to install a satellite dish on the roof of his Harvard dorm room so he could keep up to date with the stock market. His plan worked like a charm as he eventually went on to found Citadel which is now one of the largest alternative asset funds in the world.

#2 Man Group Ltd

The oldest fund on our list, the original Man Group was established as a brokerage back in 1783 by James Man. Starting off life as a sugar-broker business, the company continued to trade in commodities for decades before eventually becoming Man Group. It’s now the world’s largest publicly traded fund managing over $151 billion.

#3 Bridgewater Associates

After graduating in Finance from Long Island University (formerly C.W. Post) and gaining his MBA from Harvard, Ray Dalio founded Bridgewater Associates from his two-bedroom apartment in 1970s New York. Today, Bridgewater is the world’s largest hedge fund with over $150 billion in capital, employing over 300 people, and returning over $50 billion to its investors.

#4 Renaissance Technologies

After studying mathematics in MIT and earning his Ph.D. from the University of California, Berkeley, Jim Simons worked as a codebreaker in the Vietnam War before founding his first hedge fund in 1978. Founding Renaissance Technologies in 1982, his extensive use of quantitative models has earned him the nickname the ‘Quant King’. Today, Renaissance has over $130 billion in assets under management.

#5 BlackRock

The world’s largest asset manager, BlackRock was founded in New York by eight people including CEO Larry Fink. Larry studied real estate at the University of California and gained his BA in political Science from UCLA in 1974. Previously Managing Director of The First Boston Corporation, he went on to found BlackRock in 1988 with seven partners, including Robert S. Kapito, Susan Wagner, Barbara Novick, Ben Golub, Hugh Frater, Ralph Schlosstein, and Keith Anderson. Today, BlackRock has over $10 trillion in assets under management.

#6 Two Sigma Investments

Founded in 2001 New York by computer scientist David Siegel and mathematician John Overdeck, Two Sigma Investments uses AI, machine learning, and data science to define its trading strategies. Today, they have over $58 billion AUM and more than 1600 employees around the world.

#7 Millennium Management

After graduating from New York University in Finance and Business Administration, Israel Englander worked as a floor broker, trader, and specialist on the American Stock Exchange before founding Millennium Management in 1989. Today, Millennium is one of the largest alternative asset management firms in the world with more than $54 billion AUM.

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