By Caitlin McCabe

Stock pickers enjoyed a banner year in 2025. Just ask hedge-fund billionaire Chris Hohn.

The British investor's TCI Fund Management made $18.9 billion for clients last year, making it the most profitable hedge-fund firm in 2025. That is according to new estimates from Swiss investment firm Edmond de Rothschild, which compiles an annual list of the world's top money managers based on their gains after fees in dollar terms.

TCI's haul was the biggest annual dollar gain made by a hedge-fund firm in Edmond de Rothschild's records, the report said, topping the previous $16 billion record from Citadel in 2022. It also trounces the reported $15 billion bounty that John Paulson scored in 2007 wagering against the housing market. The figures aren't adjusted for inflation.

Geopolitical uncertainty turned last year into a stock picker's market, with trade wars and real wars unfolding across the globe. An artificial-intelligence boom through most of the year -- and subsequent concerns about a bubble -- also provided fertile ground for investors who bet on stocks.

Stock picking firms like Steve Mandel's Lone Pine Capital and John Armitage's Egerton Capital were among those that benefited from the favorable backdrop, the Edmond de Rothschild estimates show. Each earned around $4 billion for investors after fees.

For TCI, big, longstanding bets on aerospace companies paid off handsomely. The London-based firm had large stakes in U.S. jet-engine maker GE Aerospace, French aerospace supplier Safran and European plane maker Airbus, according to people familiar with the firm's positioning and regulatory disclosures. All three rallied last year as investors bet on stocks expected to benefit from rising military spending.

TCI finished the year with a 27.8% gain in its master fund, according to people familiar with the returns.

Hohn, the son of a Jamaican car mechanic, launched TCI in 2003 and quickly earned a reputation as one of the hedge-fund industry's most combative activists.

Within two years of TCI's inception, he successfully forced Deutsche Börse to drop its bid for the London Stock Exchange -- a fight that ultimately led to the departure of the German company's chief executive. The executive later memorialized his experience with the hedge funds he battled in a book titled "Invasion of the Locusts."

The years that followed brought a high-profile push by TCI for Dutch lender ABN Amro to be broken up or sold, culminating in its 2007 acquisition by a consortium led by Royal Bank of Scotland. (The deal is widely viewed to have contributed to the British bank's need for a government bailout during the financial crisis.) Then, in 2008, Hohn's firm waged a successful proxy battle for board seats at railroad operator CSX.

More recently, in 2022, TCI called for Google parent Alphabet to aggressively cut costs -- and its head count.

Yet Hohn is also known for minting returns by relying on the basics: taking big positions in companies and letting them run. His portfolio late last year also included bets on Visa, Microsoft, Moody's and freight railroad company Canadian Pacific Kansas City.

TCI's big dollar gain for 2025 is partly a function of its size: The firm managed $77.1 billion in hedge-fund assets at the end of last year, according to Edmond de Rothschild. That makes TCI the third-largest hedge-fund manager on the latest rankings, trailing only Millennium Management and Elliott Investment Management.

In general, 2025 was a good year for most hedge-fund strategies. Macro hedge-fund firms that bet on big economic shifts benefited from volatility across asset classes. Event-driven funds that bet on mergers and acquisitions and other corporate events also scored big.

Bridgewater Associates, the macro hedge-fund firm founded by Ray Dalio, notched the second-biggest haul for last year, according to the report, earning $15.6 billion in net gains. New York-based quant giant D.E. Shaw followed with $12.7 billion earned for clients.

"Everything worked last year and very little went wrong for managers," said Rick Sopher, a senior adviser at Edmond de Rothschild, which also invests in hedge funds itself.

The annual report evaluates firms based on how much money they made for investors in dollar terms -- rather than the typical percentages that are distributed privately to investors. The survey focuses on hedge funds that have made the most money since launching, meaning that older and bigger firms typically dominate its top 20 ranking.

Last year, the top 20 hedge funds outperformed on a traditional basis too. The top managers returned 15.7% last year, the Edmond de Rothschild report found. That compares to 12.6% for the broader hedge-fund industry, according to research firm HFR.

Among the factors Sopher said helped drive performance at some of the biggest funds: Higher-than-average fees that allow them to attract and retain top portfolio managers and have more sophisticated risk-management systems.

Citadel retained its position as the most profitable hedge-fund firm since inception, the report found. Ken Griffin's firm has earned $90.4 billion for investors after fees since it was launched in 1990, according Edmond de Rothschild estimates. The analysis estimates Citadel made $7.4 billion for investors last year.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com

(END) Dow Jones Newswires

January 18, 2026 19:01 ET (00:01 GMT)

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