Billion Dollar Hedge Funds Assets Grow In 2011, Albeit Tepid

Assets managed by U.S. hedge funds with $1 billion or more rose by 3% last year to $1.34 trillion, in the most tepid asset growth on record, tempered by disappointing performance.

Trade publication AR magazine's biannual Billion Dollar Club survey, which charted billion dollar shops' asset size since 2001, said more than 40% of the funds lost assets in 2011, with the majority of the decline occurring in the second half of the year. The AR Composite Index of U.S. hedge fund performance ended the year down 0.47% in its first annual loss since 2008.

Hedge funds, however, are off to a good start this year, gaining 3.35% this year as of March 1, according to Chicago-based Hedge Fund Research.

Assets for billion dollar hedge funds rose 4.3% in 2009 and 9.7% in 2010 after plunging nearly 30% in 2008, AR magazine said, when the financial crisis caused steep declines in many and wiped out some funds altogether. The largest annual growth for such funds was in 2006, when assets increased by 40.8%.

Among the 241 billion dollar funds in the U.S., Westport, Connecticut-based Bridgewater Associates again topped the chart as the largest hedge fund, with $76.60 billion assets as of Jan. 1. J.P. Morgan Asset Management, which managed $45 billion assets, came second, followed by Och-Ziff Capital Management Group LLC's (OZM) $28.4 billion.

John Paulson's Paulson & Co., whose funds all suffered losses last year, came in six after BlackRock Inc. (BLK) and Seth Klarman's Baupost Group.

-By Amy Or, Dow Jones Newswires, (212) 416-3142, amy.or@dowjones.com

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