Updated 19 September 2021. Our ranking of the best UK hedge funds has been updated for 2021. For an introduction to the structure, strategies and performance of hedge funds, visit our guide ‘What is a hedge fund?’. Alternatively, the best hedge fund books could open your eyes to the history and developments in the hedge fund industry.
About our ranking of the top hedge funds in the UK
The hedge funds below are shortlisted on the following basis:
- Assets under management
- Hedge fund staff salary level (non-partner)
- Industry awards and prestige
- Recent annual return
The hedge funds that make our best hedge fund shortlist are listed in no particular order. Other hedge funds which don’t make the shortlist are ranked by Assets Under Management AUM (see definition).
Our data sources for the largest UK hedge funds list
The hedge fund industry is private and timely, accurate data is difficult to collect across all listed managers. Mandatory disclosures in financial statements of the top partnership are limited, and the sprawling international legal entity structures mean that many of the individual funds managed are domiciled in other countries with less transparency.
As such, the data below is collated from a number of public sources including:
- Gov.uk/get-information-about-a-company
- Hedgelists.com
- Pionline.com
- Bloomberg.com
- Thehedgefundjournal.com
- Ft.com
- Glassdoor.co.uk
Updates
We strive to include the most recent sources to ensure that this comprehensive list is kept as up to date as possible. Please contact us if you would like to suggest any updates or revisions.
The top hedge funds in the UK (shortlist)
Man Group – $135bn AUM
Man Group is the worlds largest publicly listed asset management firm. Its shares trade on the London Stock Exchange under the ticker EMG.
The group has several divisions which focus on complementary strategies, including hedge funds.
- Quantitative trading
- Discretionary long positions in equity and credit
- Private markets
- Other hedge fund strategies under the ‘FRM’ brand (FRM stands for Financial Risk Management).
The FT reported in July 2021 that the Man Group reported a tenfold increase in performance fees in the first half of the year compared to the same period a year earlier. Consequently, an investment in the shares of Man Group plc itself has also produced a more-than satisfactory return to investors.
Man Group controls hundreds of funds at any time, only some of which are actively open to new investment. One of their most high profile hedge funds is the AHL Evolution fund. This $5bn fund, under the stewardship of Matthew Sargaison and Giuliana Bordigoni, the fund has returned 595% since the fund’s inception in 2005. It has done this by following trends in niche financial markets and taking positions through a variety of derivatives such as options and swaps.
Capula Investment Management LLP – $106bn AUM
Capula Investment Management is one of the largest hedge funds domiciled in the UK. Founded by Yan Huo in 2005 following a career principally at JP Morgan, Capula specialises in global fixed income assets.
Capula’s investment strategies include enhanced fixed income, absolute return and tail risk strategies.
The firm is headquartered in Mayfair, London although it also has offices in Greenwich, Hong Kong, New York, Singapore and Tokyo. It has 200 – 500 employees. The employment review website Glassdoor.co.uk has received 18 reviews from current or former employees which produces an overall score of 4.0/5.0.
The partnership generated a total of £205.7m of management and advisory fees in the year ended March 2020, together with £155.7m of performance fees.
Brevan Howard Asset Management – $58.6m AUM
Brevan Howard Asset Management is a large-scale hedge fund manager based in offices in London, Singapore, Hong Kong and more locations.
The Brevan investment strategy is global macro, which sees it craft directional bets based upon the political or economic situation in nations. Its stated aim is to take positions through convex trades. A convex trade is where the financial return behaviour is expected to be asymmetrical. I.e. a movement in the financial instruments price is likely to give upside with a higher magnitude than its possible downside. This is a risk management technique that Brevan Howard Asset Management refers to as one of their three pillars of expertise. Its approach to risk management sees it assign a designated risk manager to each investment portfolio.
Brevan clients are institutional investors, such as pension schemes, sovereign wealth and life assurers. Led by Chief Executive Officer Aron Landy, the group has expanded to over 200 employees.
Lansdowne Partners – $31.7bn AUM
Not to be confused with Hargreaves Lansdown, the FTSE 100 UK stockbroking firm, Lansdowne partners is a huge UK hedge fund manager.
The European Equity Strategy fund was launched in 1998 at the inception of the firm. It was later renamed to European Absolute Return Strategy in 2018. This flagship fund has won a string of accolades over the last decade. Including in 2017 where it won at the Investors Choice Awards (European Equity $500m – $1bn).
Other funds managed by Lansdowne Partners include:
- Developed Markets Opportunities Fund
- Greater China Fund
- Global Energy Strategy
Marshall Wace – $48bn AUM
Marshall Wallace is a large UK-based hedge fund that manages multiple sub-funds. These funds pursue a long-short equity strategy based on fundamental analysis techniques. They could be described as deep value funds but with hedge fund techniques such as short/long and derivatives.
Marshall Wallace has offices in London, New York and Hong Kong. It is led by founders Paul Marshall and Ian Wace.
Private equity giant Kohlberg Kravis Roberts bought a quarter ownership stake in Marshall Wallace back in 2015.
The Financial Times reported in June 2021 that the firm would seek to launch a $1bn Environment Social Governance (ESG) themed fund.
Prominent closures:
Arrowgrass Capital Partners [Closed]
2019 saw the sad news of the closure of Arrowgrass Capital Partners LLP. In a move which owners blamed on central banks. It was implied that the generosity employed by central banks extended the business cycle to the extent that a hedge fund such as Arrowgrass which relied upon distressed debt couldn’t sustain its strategy.
The wider group was said to manage assets in excess of $20bn, and pursue a multi-strategy investment approach including debt convertibles and credit.
The Hedge Fund Journal reported in 2009 that Arrowgrass was a team of over 50 investment professionals. Their resource-intensive approach of sourcing private market transactions allowed them to target levered returns in excess of 20%.