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Dalio replaces Soros as world’s top hedge fund manager

by Dylan Lobo on Feb 29, 2012 at 09:33

Dalio replaces Soros as world’s top hedge fund manager

Ray Dalio replaced George Soros (pictured) as the world’s top hedge fund manager in 2011, while John Paulson registered the biggest annual loss by a fund.

According to an independent report from LCH Investments NV, a firm overseen by the Edmond de Rothschild Group, Dalio’s $72 billion Bridgewater Pure Alpha hedge fund strategy - which is run out of his firm Bridgewater Associates and is the world’s biggest hedge fund - returned a massive $13.8 billion for its investors over the course of the year.

He replaces Soros who no longer runs money for investors.  

At the same time New York-based John Paulson suffered a spectacular fall, with his eponymous Paulson & Co strategy losing $10 billion after his bet on a US recovery went wrong. This was the biggest fall ever recorded by a hedge fund over a year, even outstripping the losses from the collapse of Long Term Capital Management in 1998.  

According to LCH, Connecticut-based Dalio's success is down to his expectation of a rush to safe haven assets such as US treasuries and bunds in the market uncertainty.

Dalio’s performance is all the more eye-catching in what was a tough year for the hedge fund industry, which lost $123 billion in 2011.

In the turbulence it was the macro strategies which stood up best, with six of the top 10 funds managed in this style.

LCH chairman Rick Sopher told the Financial Times: ‘Macro investing is notoriously difficult, but the best managers are able to find opportunities, especially in troubled markets.’

Although Paulson had his worst ever year he still third in LCH’s list of funds who have delivered the biggest net gain since inception with Bridgewater occupying top spot following its stunning year (see table below).

Hedge Fund Net Gains Year Founded
Bridgewater Pure Alpha $35.8 billion 1975
Quantum Endowment Fund $31.1 billion 1973
Paulson & Co. $22.6 billion 1994
Baupost $16 billion 1983
Brevan Howard $15.7 billion 2003
Appaloosa $13.7 billion 1993
Caxton Global $13.1 billion 1983
Moore Capital $12.7 billion 1990
Farallon $12.2 billion 1987
SAC $12.2 billion 1992

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