LONDON — The world’s top 10 hedge funds netted US$28 billion (20 billion euros) for their clients in the second half of last year, the Financial Times reported Wednesday. Data calculated by hedge-fund investor LCH Investments showed that the top 10 funds made US$2 billion more for their clients than the net profits of Goldman Sachs, JPMorgan, Citigroup, Morgan Stanley, Barclays and HSBC combined. According to the research, the 10 funds have generated a total of US$182 billion in profit for their investors since they were founded, the British business newspaper said. Veteran businessman George Soros has made US$35 billion for his clients since setting up the Quantum Fund in 1973, but has stiff competition from John Paulson’s Paulson & Co., which made US$5.8 billion in the second half of 2010. Paulson, who has made US32.2 billion for his clients since he set up in 1994, was one of the few investors to predict and profit from the 2007 subprime crisis. Hedge funds, the largest of which employ around 100 staff, are exclusive investment funds open only to wealthy individuals or to professional investors such as insurance companies and pension funds.
They have come under fire for their secretive nature and for their tendency to bet against the market, or “hedge,” which helps them to reduce market exposure and also to profit from a fall in the value of securities and currencies.