Goldman loses hedge fund top spot

Date: Tuesday, March 6, 2007
Author: William Hutchings, Financial News US

JP Morgan Asset Management, which in 2004 bought US hedge fund manager Highbridge, has replaced Goldman Sachs at the top of a list of the 10 biggest US hedge fund managers, as its assets under management rose to $34bn (€26bn).

The firm had $28.8bn under management at the end of June, according to Absolute Return, a US hedge fund industry magazine.

Goldman Sachs Asset Management increased its hedge fund assets under management from $29.5bn at the end of June to $32.53bn six months later.

In a sign that investors are not put off by higher fees in a period of six months $12bn was poured into into one of the world's most expensive managers. The hedge fund run by Renaissance Technologies rose to sixth place on the list of largest US hedge fund firms after its assets almost doubled to $24bn at the end of December.

The manager is gathering assets for a fund that it has said has capacity of $100bn, which would make it the largest raised in history.

Renaissance is offering investors a choice of fee structures. These include a 0.5% management fee, which is below the industry standard, coupled with a performance fee of 30% of any returns above the S&P 500 index, which is above the norm.

Renaissance used to charge investors management fees of 4% of assets and performance fees of 44% of any gains on Medallion, a $5.4bn managed futures hedge fund that relies entirely on systems and which achieved a net return of just over 34% a year since it started in 1988.

The firm finished buying out all third-party investors last year but has continued running the fund for itself.

Other managers on the list include Bridgewater Associates which lifted its assets from $28bn to $30.2bn; DE Shaw grew from $23.2bn to $26.3bn and Farallon Capital Management expanded from $18.1bn to $26.2bn.

Och-Ziff Capital Management's assets rose from $17bn to $21bn, Cerberus Capital Management from $11.6bn to $19.15bn, Barclays Global Investors from $17bn to $18.9bn and ESL Investments from $15.5bn to $18bn.