Britain still hosts only 14 of the world’s 100 top-performing large hedge funds despite being the hedge fund capital of Europe, according to a review of the industry by Bloomberg Markets.
Bloomberg Markets analysed returns unadjusted for risk over the first 10 months of 2010 to produce its rankings, which do not relate to long-term performance.
The ratio of about 15% does not improve for the world’s 20 top-performing mid-sized hedge funds, of which Britain houses only three.
The top-performing large British fund was Autonomy Global Macro, while the top-performing large managers available to British retail investors were Richard Plackett and Ralph Cox, for their BlackRock UK Emerging Companies fund.
The highest-ranking British based mid-sized fund was GLG Market Neutral, run by Steve Roth.
On a corporate level, only three of the world’s 20 most profitable hedge funds are based in the country: Leda Braga’s BlueTrend and Michael Platt’s BlueCrest International, run by BlueCrest Capital Management, and the Brevan Howard Master fund, managed by Brevan Howard Capital Management.
Britain ranked little better in the list of the world’s 20 largest hedge fund firms, supplying only four of the total, including Man Group in third and BlueCrest Capital Management, two places behind George Soros’s Soros Fund Management, in ninth. (article continues below)
However, the survey is based on only 10-month figures and raises questions about the long-term sustainability of some of the management styles in the sector.
In particular, the top-performing large fund is run by a Russian activist investment house, Prosperity Capital Management.
The firm has continued to operate in Russia despite the authorities expelling senior executives at Hermitage Capital, another Russian hedge fund, for activist tactics.
Mattias Westman, who heads up Prosperity, told Bloomberg Markets: “There is always a risk, but things are becoming more civilised.”
According to Bloomberg Markets, the top-performing fund last year was Structured Servicing Holdings, run by American-based Structured Portfolio Management, one place ahead of Prosperity’s Russian Prosperity fund.
In third place was the $34 billion (£22 billion) Pure Alpha II fund run by fellow American firm Bridgewater, the largest hedge fund manager in the world.
Pure Alpha II was also the world’s most profitable hedge fund, according to the survey, with £2.3 billion in earnings in 2010 to October 29.
The world’s top-performing mid-sized hedge fund was VR Global Offshore, run again by a Russian-based house, VR Capital Group.
VR Global Offshore ranked only one place ahead of another Prosperity fund, Prosperity Quest Sub.