By Alistair Barr
George Soros' hedge-fund firm grew strongly through the worst
financial crisis since the Great Depression, while big rivals
mostly shrank, according to results of a survey released Tuesday by
industry publication AR.
Soros Fund Management had $24 billion in assets at the start of
July, up more than 14% from the end of 2008 and more than 41% from
a year earlier. That made the firm the fifth-largest in the
hedge-fund industry, up from sixth at the end of 2008, AR said.
Soros was one of the few investment managers to foresee the
global financial crisis that erupted last year. As markets
collapsed, he stepped back into trading, helping the firm's
flagship Quantum Endowment fund gain almost 10% in 2008. This year,
the fund was up almost 19% through the end of July, AR
reported.
Another manager who saw trouble ahead was John Paulson, head of
Paulson & Co. After generating huge gains in 2007 from bets
against mortgage-related securities, Paulson continued his winning
streak in 2008, partly by betting against financial
institutions.
This year, Paulson bet big on gold and has taken large stakes in
Bank of America Corp. (BAC) and Citigroup Inc. (C). His funds were
up as much as 16.38% through the end of July, AR said.
Despite those gains, Paulson's assets under management still
dropped more than 6% to $27.2 billion this year as investors
redeemed some of their money to rebalance portfolios to avoid being
too concentrated in certain funds and strategies, AR said.
Paulson was the third-largest hedge-fund firm by assets,
maintaining its position from the end of 2008, AR noted.
Bridgewater Associates, run by Ray Dalio, remained the largest
hedge-fund firm in the world, overseeing $37 billion in assets at
the start of July. That was down more than 4% from the end of 2008,
AR said.
The asset-management division of J.P. Morgan Chase & Co.
(JPM) remained the second-largest hedge-fund business, with $36
billion in assets, up 9.4% from the end of 2008, AR said.
D.E. Shaw Group remained in fourth place with $26.7 billion in
assets. That was down 6.6% from the end of 2008, AR said.
The asset-management division of Goldman Sachs Group Inc. (GS)
ranked sixth, up one place from the end of 2008. Assets under
management inched up to $20.8 billion, AR said.
Och-Ziff Capital Management Group LLC (OZM) was seventh in AR's
rankings. The firm, run by Dan Och, lost 6.33% of assets in the
first half of 2009, bringing its total to $20.7 billion, AR
said.
Baupost Group, run by Seth Klarman, became the eighth-largest
hedge-fund firm, with assets of $19 billion, up 13% in the first
half of 2009, AR said.
Farallon Capital Management, headed by Thomas Steyer, saw assets
fall 10% to $18 billion in the first half of this year. That left
the San Francisco-based firm ninth in AR's rankings.
Angelo, Gordon & Co.; Avenue Capital Group and Renaissance
Technologies tied for 10th in AR's rankings, each with $17 billion
in assets.
-Alistair Barr; 415-439-6400; AskNewswires@dowjones.com