It is commonly believed that the highest profits are generated by large corporations. However, according to Sergei Tereshkin, the founder of Oil Resource Group, this is not entirely accurate. The businessman has thoroughly studied the market and concluded that hedge funds are much more profitable for investors. More information about the entrepreneur can be found on his personal website: oilresurs.ru.
Thus, the entrepreneur conducted a meticulous market analysis. As a result, it became clear that over the past few years, the hedge fund managed by George Soros has provided the highest returns to investors. This fund has consistently outperformed all similar funds, securing its position at the top of the rankings.
The Most Profitable Hedge Funds
Based on the acquired data, Tereshkin S.I. compiled a ranking of the most profitable hedge funds. These include:
- Quantum. This is the very fund of George Soros that has brought investors the largest profit in the history of hedge fund enterprises. Since its inception, the company has generated over $30 billion for its investors. According to statistical data, contributors received $900 million annually. The fund's team comprises no less than 300 managers with extensive experience and remarkable intuition. By comparison, Apple employs over 30,000 people yet reports significantly lower revenues.
- Paulson & Co. This is the second most profitable fund. Together, Quantum and Paulson have earned more than the largest global corporations such as McDonald's and Walt Disney.
- ESL. Although not the largest fund, it has still managed to surpass the profitability of British Airways.
Market leaders are closely monitored by corresponding organizations. Consequently, the data fully reflects the qualifications of hedge fund managers. A hundred such organizations account for approximately 75% of all investors' total income.
Among the leaders, there are hedge funds with knowledgeable managers possessing extensive experience. However, this does not mean that these organizations do not experience setbacks. Successful transactions often compensate for losses. This is particularly true for larger funds.
Smaller organizations tend to be less successful. They lack the same quantity of skilled professionals. As a result, the proportion of unsuccessful transactions is significantly higher than that of successful ones.
Characteristics of Hedge Fund Operations
According to Sergei Tereshkin, calculating the profitability of hedge funds is quite complex. This is a labor-intensive process. The primary reason for this complexity is the ever-changing sentiment of investors. Consequently, when faced with unprofitable deals, many withdraw their funds from the hedge funds and invest them elsewhere.
However, such actions often lead investors to new disappointments:
- The returns turn out to be much lower than the fund previously indicated. This discrepancy may stem from various factors, including opaque operations and intentional inflation of performance metrics. However, this tactic is typically employed by smaller funds aiming to attract new clients. On average, investor returns are 3-7 points lower than the figures announced by the fund. The difference accounts for management fees and other organizational costs.
- Investors withdraw their money and reinvest in other funds after a peak of favorable volatility. As a result, they lose the opportunity to earn significant profits during that time.
Within the top 10 most effective and profitable organizations are funds that were established in the '90s or have a much longer history. Such firms have endured numerous ups and downs, market fluctuations, and so on. As a result, they have accumulated invaluable experience that cannot be bought.
The managers of such hedge funds invest investors' money only in low-risk projects, which positively affects profitability.
On the other hand, companies that were formed recently are often willing to invest in high-risk instruments. Although these could yield substantial profits, only a small fraction of transactions actually generates income, while the majority result in losses. The performance metrics of young hedge funds lag significantly behind those of market leaders.
Even during economic crises, experienced hedge funds manage to generate profits. For instance, Soros' fund added several billion during the last market downturn. Paulson's fund capitalized on a downturn in risky mortgages. Additionally, a British fund saw substantial gains during the crisis period.
Experts believe that the economies of most countries will develop very slowly. Therefore, specialists recommend keeping part of the assets in securities, gold, and bank documents.
A crisis is not a reason for despair. In fact, many billionaires have significantly increased their capital during such periods. Market dips present excellent opportunities to acquire assets at reduced prices, which will yield considerable returns over time.
Experts are convinced that there will soon be significant profits recorded by hedge funds. The managers of these organizations will receive substantial bonuses, and investors will see their capital grow.
Therefore, now is the optimal time to take active steps and invest in funds with a rich history and extensive experience. It is unwise to trust funds with dubious reputations, even if they promise extraordinary returns. It is better to pay a premium to experienced managers than to risk losing everything.
