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With trillions of dollars in assets and dozens of billionaires, the hedge fund industry is doing fine, even if there's been a renewed push from the industry's biggest backers to rein in costs.
Funds performed well in 2024, returning more than 10% through November, according to industry tracker PivotalPath — even though the average firm won't match the returns of the S&P 500, which is on track to finish above 20% for the second year in a row. Managers handled the volatility around the reelection of former president Donald Trump well, and top managers can still command eye-popping fees and yearslong lock-up periods.
But, like any sector, the industry is increasingly splitting between the haves and the have-nots. Based on conversations with a dozen industry insiders — from LPs to prime brokers to fund executives themselves — Business Insider compiled a list of 10 hedge funds to watch in the coming year.
It's a mix of longtime giants, new launches, struggling managers, and overseas specialists.
Walleye Capital
$7.4 billion Walleye — a firm that is hoping to be the best midsize multistrategy fund in the industry — spent 2024 reconfiguring.
Coming into the firm were big names from bigger firms: former Citadel executives and investors like Matt Giannini and Rory Murphy, one-time ExodusPoint marketer Anil Jethanandani, former Balyasny PM Anil Gondi, WorldQuant's options head Rupert Graham, and more. Meanwhile, leaders like Raj Sethi, who topped the manager's macro and fixed-income team, and Anuraj Dua, who had led some systematic macro efforts at the firm, departed the manager.
The firm's ambitions have grown. The manager, which started in Minnesota as an options market maker, now has offices across the US as well as in London and Dubai. And it has former Citadel executive Tom DeAngelis as president.
With strong performance in 2024 — Walleye was up 15.4% through November — the firm is set to continue to make headlines in 2025.
Reuters/Carlos Barria
Asia's hedge fund scene has been booming, with new launches in Singapore and Hong Kong from former Millennium executives as well as expansions from regional players like Dymon Asia. But while many players in the region focus on markets like Japan or South Korea — or look westward to the Middle East — Pinpoint boasts its China focus proudly.
The manager, which has headquarters in Hong Kong but offices in Shanghai, is set to have its best year in its $1.2 billion multistrategy fund since 2020, with an 8.6% gain through November. Yet it is the firm's China fund, which is soft closed, that has been the story of the year, with a 17.3% gain through November, according to HSBC's Hedge Weekly report. As Trump woos China's leader, Xi Jinping, Pinpoint hopes its expertise in the country will set it apart in 2025.
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Another year, another CIO departure. Since 2015, Viking Global, the $48 billion stockpicker run by cofounder Andreas Halvorsen, has had four CIOs or co-CIOs depart the firm, including Ning Jin, who left the firm in August.
Viking, however, has proven its ability to train the next generation of investment talent internally and keep the trains on schedule when a senior leader departs.
As Jin follows the path of many former Viking investing heads in setting up a new fund, the firm — up 12.2% through November — has tapped portfolio manager Justin Walsh to be its latest CIO.
According to a presentation he gave to Harvard Business School students this year, one of his biggest worries is a possible multistrategy meltdown.
Eisler Capital
Ed Eisler's eponymous firm has struggled to keep up with the multistrategy pack. With most firms in the firm's peer group expected to return around 10% or more this year, $4 billion Eisler will likely end 2024 with returns below 5%. The manager had returned a little over 2% on the year through November, a person close to the manager said.
It's not for a lack of trying, of course — another person familiar with the firm told BI that Eisler forced portfolio managers to be fully deployed earlier, meaning all of the capital they managed had to be invested in something, even if they didn't necessarily see a good opportunity.
One tough year doesn't doom a manager, and turnaround stories like Schonfeld prove that any fund is just a strong stretch of performance away from being back on top. Whether Eisler can rise to the occasion in 2025 remains to be seen.
Photo by: Heidi Gutman/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images
One of London's blue-chip managers, $70 billion Marshall Wace spent 2024 institutionalizing even further. The firm is fully invested in the war for talent, despite its billionaire cofounder speaking out against the trend — the manager has spent recent years poaching talent from rivals and added a talent surcharge on top of its existing fees.
It led to some growing pains internally, as Business Insider reported, as some of the new hires clashed with some of the firm's old guard. Still, the manager is on as stable a ground as ever.
The firm's expansion to the Middle East, with a new office in Abu Dhabi, is proof that it's not slowing down, and the firm just nabbed a former Citadel portfolio manager to trade for them. Its Eureka multistrategy fund was up 14.5% through October, a person close to the firm said.
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A new San Francisco-based hedge fund is set to launch in the new year with serious backers and Silicon Valley-flavored team.
Leopold Aschenbrenner, a former OpenAI employee who graduated from Columbia at 19, is set to launch his AI-powered fund with capital from Stripe's founding brothers, Patrick and John Collison, as well as former Y Combinator partner Daniel Gross and one-time GitHub CEO Nat Friedman.
Named after a series of blogs Aschenbrenner wrote on AI's impending might, Situational Awareness will be a good test of what pure AI can do in the hypercompetitive investing industry.
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2024's biggest launch, Bobby Jain's new firm, has sputtered out of the gate. One of the biggest from 2023 has not faced the same challenges — and is attracting new capital.
Ilex Capital, a stock-picking multimanager run by former Citadel employees Jonas Diedrich and Dave Sutton out of London, is set to end the year with more than $3 billion in assets after raising another $1.5 billion this year. The firm is one of the most notable, alongside former Millennium PM Diego Megia's Taula Capital, to spin out of the big multistrategy firms.
As managers like Millennium look for places to put their ever-growing assets, deals with former employees looking to start their own firm offer an interesting opportunity.
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Long-running Tiger Cub Lone Pine Capital is getting its mojo back. Its long-short hedge fund Cypress made 9% in November alone, bumping its 2024 gains to 34.3% through the year's first 11 months.
Beyond strong performance though, the firm is investing in its business and looking to grow. After the retirement of its billionaire founder Steve Mandel five years ago, and the departure of buzzy industry star Mala Gaonkar in 2022, the $16 billion Connecticut-based manager has dealt with rocky performance and outflows.
In response, the firm has performed well the last two years and — for the first time in its history — put resources into its marketing. The 27-year-old manager hired Pat Cronin to be its first-ever business development leader in 2022, redid its website, and even attended last January's iConnections conference in Miami to meet with potential investors.
While some managers slowly fade away after a founder steps back, Lone Pine has decided to ramp up — and has two strong years of performance to go off of.
TED
The late Jim Simons had already passed the torch of his legendary quant manager Renaissance to the next generation, but his death in May was still a monumental milestone for the asset manager.
Renaissance, known for the world-beating performance of its Medallion fund, which is only available to fund employees, had battled redemptions and poor performance in recent years in its largest strategies available to outside investors. But 2024 was a strong year, as its largest external fund returned close to 24% through November.
Unlike some of its quant rivals like Two Sigma and D.E. Shaw, Renaissance has not expanded into non-systematic strategies. In its first year without its visionary founder, the Long Island-based manager is one to watch.
Boston-based Whale Rock has dealt with the market's peaks and valleys in recent years. It surged 32% in 2023 after losing 40% and 9%, respectively, the two years prior. This year was another peak.
The manager's flagship fund is up 51% through November, thanks to a tech-heavy portfolio full of big-name US companies and under-the-radar international firms. A recent report notes that Alex Sacerdote's $9 billion firm plans to reopen to new capital, hoping to raise between $200 million and $300 million.
