The 15 Largest Hedge Funds In The United States

A cup full of clients, a few drops of investment, and a pinch of risk; add a few billion dollars and you have a globally relevant hedge fund.

While at a glance, hedge funds can seem like a distant and convoluted concept, in reality, they have simply pooled investment funds that utilize client money to either beat out the current market or provide a protective barrier (hedge) against unforeseen market changes.

When hedge funds function correctly, they maximize investor returns and minimize risks.

Overall, with upwards of 3,600 hedge funds registered in the US alone, and the top 15 of those having almost 600 billion assets under management (AUM), there’s an awful lot of money being invested into these firms.

So who are the largest hedge funds in the country? To answer that, we’ve assembled a list of the 15 largest hedge funds in the United States, based on the 2020 reports of their assets under management.

Top 15 Largest Hedge Funds

1. BlackRock

   Headquarters: New York City, New York
   2021 Annual Revenue: $19.374 billion

   When it comes to overall assets under management, BlackRock is actually the largest in the world.

   The company manages an astounding $8.67 trillion across pension plans, governments, insurance companies, official institutions, endowments, charities, corporations, banks, sovereign wealth funds, mutual funds, individual savers, and hedge funds.

   Being a massive company, BlackRock employs over 16,000 employees around the world and has 70 offices in 30 countries. Some of the company’s most notable divisions include iShares, BlackRock Solutions, and ESG investing.

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2. Citadel Securities

   Headquarters: Chicago, Illinois
   2021 Annual Revenue: $6.7 billion

   Citadel LLC is a Chicago-based multinational hedge fund founded in 1990. Interestingly, this firm was conceived by Kenneth Griffin, who was a 19-year-old Harvard student at the time. As a sophomore, he began trading convertible bonds.

   Today, Citadel LLC is known to prioritize equities, fixed income, commodities, credit, and quantitative strategies. The company employs roughly 1,400 employees and maintains offices throughout North America, Europe, and Asia.

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3. D.E. Shaw Co.

   Headquarters: New York City, New York
   2021 Annual Revenue: $721 million

   Founded in 1988, D.E. Shaw Co. is another firm that utilizes sophisticated mathematical models and computer programs to gauge when market anomalies will occur, and when they should invest. This company employs 1,400 people.

   D.E. Shaw Co.’s success can be seen in the fact that from the beginning, the company has consistently delivered the fifth-highest returns on investment in the world.

   Being highly reliant on mathematics and programming, D.E. Shaw Co. is also known for several educational programs. Some of these include: the American Regions Mathematics League, Worldwide Online Olympiad Training (WOOT), and the International Mathematics Olympiad, to name a few.

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4. Bridgewater Associates

   Headquarters: Westport, Connecticut
   2021 Annual Revenue: $399.3 million

   Earning their place as the largest hedge fund in the United States, Bridgewater Associates employs roughly 1,500 and serves mostly institutional clients. Overall, they handle and work with pensions, endowments, charitable foundations, foreign governments, and central banks.

   Though this hedge fund firm’s headquarters is currently in Westport, Connecticut, it was originally founded in New York City. Being founded in 1975, Bridgewater’s AUM has grown significantly enough to land the number one spot in only 46 years.

   At the moment, this company offers the following funds:

   • Pure Alpha. This fund specializes in investment strategies.

   • Pure Alpha Major Markets. This fund is a subset of Pure Alpha and focuses mainly on various opportunities Pure Alpha invests in.

   • All Weather. This fund specializes in asset allocation strategies.

   • Optimal Portfolio. Generally speaking, this fund is a version of the All Weather fund with active management.

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5. Renaissance Technologies

   Headquarters: East Setauket, New York
   2021 Annual Revenue: $370 million

   Utilizing mathematical and statistical analyses, Renaissance Technologies has developed quantitative models that advise their trading, investments, equities, futures contracts, forward contracts, and exchanges.

   The company’s methods are extremely secretive, which is part of the reason they’re so successful.

   Founded in 1982 and maintained by computer scientists, Renaissance Technologies has returned an impressive 39% of their after fees over a 30-year span (1988-2018), and currently returns more than 66% annualized before fees.

   For a somewhat small firm with only 300 employees, this is an incredible return rate.

6. Elliott Management

   Headquarters: New York City, New York
   2021 Annual Revenue: $115 million

   Elliott Management is an all-encompassing investment management firm that handles everything from hedge funds and equities to commodities and real-estate. The company employs approximately 468 people and has investments in Twitter, Comcast, Samsung, Barnes Noble, and more.

   As of 2020, Elliot plans to move their headquarters from New York City, New York to West Palm Beach, Florida. This is partially believed to be due to the rapid increase in Florida hedge funds over the past five years.

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7. Two Sigma

   Headquarters: New York City, New York
   2021 Annual Revenue: 72.6 million

   Two Sigma Investments applies artificial intelligence, machine learning, and distributed computing to their investment strategy. Founded only 20 years ago in 2001, the company has had a tech-centered approach to investing since its conception.

   Currently, Two Sigma Investments employs 1,600 people and maintains offices across North America, Europe, and Asia. The company is noted as having a higher rate of return compared to some older firms.

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8. Wellington Management

   Headquarters: Boston, Massachusetts
   2021 Annual Revenue: $64.2 million

   With over 2,200 employees, Wellington Management Company is a private investment management firm that employs a considerable amount of people. This company is also the oldest on this list, being founded in 1933.

   So how has Wellington stayed relevant? Other than advising over 2,200 institutions across 60 countries, the company also uses all-encompassing investment strategies to deliver its high AUM.

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9. Farallon

   Headquarters: San Francisco, California
   2021 Annual Revenue: $63.2 million

   Founded in 1986, Farallon Capital is an American investment firm that currently employs 165 professionals, and maintains offices in the United States, Brazil, Japan, Singapore, Hong Kong, and the UK. This firm mainly manages capital for clients such as university endowments, foundations, and other wealthy individuals.

   Hitting a high point in 2005, Farallon claims to have formulated a commonly-used model that focuses on potential and risk-adjusted returns, known as absolute return investing. However, this claim is likely not 100% accurate, seeing as the practice dates back to as early as 1949.

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10. Viking Global Investors

    Headquarters: Greenwich, Connecticut
    2021 Annual Revenue: $58.2 million

    With a rough and tumble name like Viking Global Investors, it’s no surprise that this company battled its way to the 15th spot on this list. Viking is a Connecticut-based hedge fund founded in 1999 and employs roughly 200 professionals.

    Overall, this company focuses on early and late-stage ventures to achieve their AUM numbers.

11. AQR Capital Management

    Headquarters: Greenwich, Connecticut
    2021 Annual Revenue: $52 million

    AQR Capital Management is a major Connecticut-based investment firm with over 1,000 employees and locations in Boston, Chicago, Los Angeles, Bangalore, Hong Kong, London, Sydney, and Tokyo.

    In general, AQR’s investments are driven by quantitative analysis, as well as predicted values and momentum, which they then use to create informed financial models.

    AQR is well-known for its academic staff, with at least half of the company’s employees holding PhDs.

    Maintaining an interest in education, the company partnered with the London Business School, and the two established The AQR Asset Management Institute in 2014. This school mainly focuses on valuable investment skills, such as asset management research and thought leadership.

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12. Baupost Group

    Headquarters: Boston, Massachusetts
    2021 Annual Revenue: $46.1 million

    Founded by Harvard professor William Poorvu and his associates in 1982, this fund has surprisingly large assets under management for only employing 145 people. The firm also has two headquarters in Boston and London, but mainly operates in America.

    Overall, Baupost Group focuses on risk management, long-term investments, and value investing. The company’s top members and CEO Seth Klarman put emphasis on taking emotions out of investing, something that they’ve given academic speeches about.

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13. Canyon Capital Advisors

    Headquarters: Los Angeles, California
    2021 Annual Revenue: $14.4 million

    Canyon Capital Advisors is the second hedge firm on this list founded on the west coast and specializes in situation investments for sovereign wealth funds, family offices, endowments, foundations, pension funds, and other institutional investors. Founded in 1990, the company now has roughly 200 employees.

    In general, Canyon uses a mixed strategy of working with bank debt, distressed securities, convertible arbitrage, risk arbitrage, securitized assets, risk arbitrage, equities, and special situation securities to garner their AUM.

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14. Millennium Management

    Headquarters: New York City, New York
    2021 Annual Revenue: N/A

    Founded in 1989, Millennium Management currently employs approximately 2,800 people and provides services across North America, Europe, and Asia.

    Overall, this firm is made up of around 200 investment teams that offer voluntary advising services for private funds.

15. Davidson Kempner

    Headquarters: New York City, New York
    2021 Annual Revenue: N/A

    Davidson Kempner Capital Management is an institutional alternative investment management firm, with a heavy focus on hedge funds. The company manages 347 employees across five offices in New York City, London, Dublin, Hong Kong, and Philadelphia.

    Typically, Davidson Kempner focuses on a bottom-up approach to investing. Their gravitation towards fundamental analysis leads them to regularly invest in merger arbitrage, distressed investments, equity, convertible bonds arbitrage, bankruptcies, and credit.

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Author

Jack Flynn

Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.