5 Best Performing Hedge Funds in the World

By Shannon C , last updated February 1, 2012

With AUM (assets under management) often skyrocketing into the billions of dollars, hedge funds might readily be considered the rock stars of the financial world. The funds themselves, and their high-powered and high profile managers, walk the red carpet of the financial scene each and every day. They are always aware of what is at stake. Their competitors are poised to curry favor with well-heeled investors who have plenty of big ticket investing options to choose from. In identifying the hedge funds with the best performance track records worldwide, it is equally as important to look at who the manager is, as their personal philosophy is likely fueling the fund's performance above and beyond what market fluctuations can account for.

Tiger Global

With AUM of over six billion and a recently reported annual return at a whopping 45 percent, Tiger Global is the clear frontrunner in terms of return on investment. Managed by the high-powered investment team of Feroz Dewan and Chase Coleman, who are currently favoring a long/short strategy, Tiger Global is based in the United States. Co-manager Chase Coleman is a verified descendant of Peter Stuyvesant, the gentleman who is responsible for constructing the wall that eventually gave rise to the name "Wall Street" in New York City's financial district.

Renaissance Institutional Equities

With AUM of seven billion and a stunning return on investment at just over 33 percent, Renaissance Institutional Equities from the United States currently holds the silver medal for the top performing hedge fund worldwide. Peter Brown and Robert Mercer, the funds co-managers, can feel proud of their joint accomplishment using a quantitative strategy in a very tough global market economy.

Pure Alpha II

With 53 billion in AUM, Pure Alpha II is not just one of the best performing hedge funds in the world; it is also one of the richest in terms of assets. Raking in strong returns of 23.5 percent and the clear frontrunner star in the star-studded Bridgewater & Associates hedge fund portfolio, Pure Alpha is the bronze medalist for the best performing hedge funds worldwide. Pure Alpha II has a macro strategy and a noted leader in manager Ray Dalio, who has spearheaded several other notable hedge funds, including Pure Alpha I.

Discus Managed Futures Program

Managed by a two man team of Jean-Philippe Bouchard and Philippe Jordan at Capital Fund Management located in France, Discus Managed Futures Program has the singular distinction of being the only non-United States based hedge fund to make it into the top five this season. With AUM of 2.5 billion and a whopping 20.9 percent in annual returns, Discus Managed Futures Program has a managed futures strategy that continues to shine brightly in the jam-packed hedge fund marketplace.

Providence MBS

Finally, Providence MBS, located in the United States and managed by Russell Jeffrey, pulls securely into fifth place with 1.3 billion in AUM and a total reported annual return of 20.5 percent. With a strategy based around mortgage-based arbitrage, Providence MBS is clearly benefitting from the real estate misfortunes of others nationwide.

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