The hunt for hedge fund alpha

The search for trading alpha, investing alpha and the next frontier

Own a small number of large stakes in companies. Buy and hold for the long term. Rarely take short positions and basically a long only. Don’t use leverage. A team of 7 investment professionals.

The firm’s name is TCI, and it is called a “hedge fund”.

Own a hugely diversified portfolio of stocks, bonds, commodities, and derivatives. Trade the whole portfolio very frequently. Shorting. Hedging. Market Neutral. Try to eliminate factor exposure. Stop positions out after small losses. Run around 10x leverage. A team of more than a thousand investment professionals.

The firm’s name is Citadel, and it is called a “hedge fund”.

Both these firms appeared this week in the annual Edmond de Rothschild/LCH survey of hedge fund returns. Chris Hohn’s TCI made a record dollar amount of returns in 2025 of $18.9bn. The media lauded TCI for beating Citadel’s previous record performance from 2022. Even more conventional hedge funds use Edmond de Rothschild/LCH statistics in their marketing – Citadel writes o…