Big hedge funds' assets edge lower in 2016: Billion Dollar Club survey

BOSTON (Reuters) - Assets managed by the largest hedge funds slipped in 2016 in their first calendar-year decline since the financial crisis, according to a survey released on Thursday by data and news provider Hedge Fund Intelligence.

The twice-annual Billion Dollar Club report showed that the 309 largest hedge funds oversaw assets of $1.88 trillion at the beginning of January 2017. This marks a 0.04 percent contraction from a year earlier.

Assets declined last year at more than half of the hedge funds managing more than $1 billion, also a first since the financial crisis.

The data tracks roughly two-thirds of the entire hedge fund universe, which is generally estimated to oversee $3 trillion. It illustrates the difficulties the industry has faced as investors like pension funds are pulling money out in response to hedge funds' lackluster returns and high fees.

The biggest decline in assets was at Och-Ziff Capital Management, one of only a handful of publicly traded hedge funds. Its assets dropped by $11.1 billion to $33.5 billion, the survey said.

Och-Ziff last year settled charges with the U.S. Justice Department that some employees had bribed officials in Africa. A number of pension funds, including the state of Rhode Island, dropped the firm as they pulled back their exposure to hedge funds.

York Capital Management's assets dropped to $16.2 billion from $22.3 billion. Paulson & Co, one of a number of hedge funds to lose a lot of money on Valeant Pharmaceuticals International Inc, showed a decrease to $9.82 billion from $14.21 billion, the survey reported.

But there were winners as well.

Bridgewater Associates retained its spot as the biggest hedge fund as its assets climbed to $122.3 billion from $104.2 billion.

Indeed Bridgewater and AQR Capital Management controlled 10.24 percent of the Billion Dollar Club's assets. This was the first time the two biggest firms in the exclusive club jointly oversaw more than 10 percent.

Representatives for the funds either declined to comment or did not respond to requests seeking comment.

A notable new entrant is distressed debt investment firm Silver Rock Financial, which received funding from junk bond investor Michael Milken and had $2.3 billion at the start of 2017.

Assets shrank at Folger Hill Asset Management and TPG-Axon Capital Management, which were dropped from the club.

(Reporting by Svea Herbst-Bayliss; Editing by Lisa Von Ahn)