Research for this year’s survey began in early February and involved searching various databases (including BarclayHedge and Preqin) and sifting through data on thousands of funds for the top-performing broad strategy funds that manage at least $300 million.
It presents more than 20 distinct data points, which help create a clearer picture of the quality of returns, tracking volatility, drawdowns, Sharpe ratios, and market correlations over various periods, all the way back to the inception of each fund. The purpose of this survey is to identify funds that consistently deliver compelling performance over a minimum of five years, through 2021. And two-thirds of the funds on this year’s list also made the 2021 survey, further highlighting the consistency of managers in the Top 50. Just as important, this rate of return was again achieved with significantly less risk than the market. Several more compelling findings: The average age of the Top 50 is 13.5 years - nearly triple the life expectancy of the average fund, and they’ve been generating nearly the same annualized net returns since inception that they have over the past five years: 13.6 percent. Over the past five years, the Top 50’s market correlation was just 0.32, which generally affirms that these managers are delivering returns largely based on their own wits. One key reason that allocators are willing to pay hedge fund fees is the promise of receiving attractive returns that are largely uncorrelated to the market. It’s no surprise that the Top 50’s 5-Year Sharpe Ratio of 1.75 was more than 60 basis points higher than the market’s. The 50’s average worst drawdown during the same time was 10.7 percent, while the market’s was nearly double that figure. In having nearly kept pace with the S&P 500, the Top 50 did so with significantly less risk and low market correlation.īetween 20, the standard deviation of the Top 50 was under 11, while the S&P 500’s was over 15. The Top 50 funds collectively returned annualized gains that were more than twice the industry’s average over the past five years (15.5 percent), having trailed a raging bull market by just 3 percentage points. The latter point suggests the average manager’s penchant to invest in securities that move the S&P 500. But as the group showed two years ago, this year’s crop of funds outperformed the market by more than 7 percentage points through the first quarter of 2022.īarclayHedge reported that over the past five years through 2021, the average hedge fund in its universe produced net annualized gains of 7.2 percent, with a Sharpe Ratio of 0.86 and market correlation of 0.90. And like the 2020 edition, when Covid-19 initially struck, release of this year’s survey again collides with a seismic event - a geopolitical shock wrapped around soaring inflation and rising interest rates. You’ll also get to explore the world beyond our offices through private museum tours, food outings, and firm-sponsored music and film festivals.Īs an intern, you’ll work individually and in teams to tackle complex projects that directly influence the firm’s business decisions.Over the past five years through 2021, the Top 50 hedge funds collectively generated net annualized returns that trailed a red-hot S&P 500 by just several percentage points, but did so with significantly less risk.
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