By 2018, AQR had secured the second place in the global ranking of hedge fund management companies. The founders of the company, including Cliff Asness, were included in Forbes' list of billionaires. Over the past five years, overcoming numerous challenges, the company has demonstrated impressive returns, made possible by the implementation of an innovative investment strategy using artificial intelligence.
Last year was pivotal for many hedge funds and quantitative companies, including AQR, located in Greenwich. Under the company's management, assets grew to $187 billion, increasing by $73 billion in just 2025. All three founders, who were already billionaires, doubled their wealth, as reported by Forbes.
As of today, Cliff Asness, the Chief Investment Officer of AQR and the largest private shareholder with a 30% stake, has a net worth of $6.3 billion, placing him 664th on the list of the world's richest people. His partners, AQR co-founders John Liu and David Kabiller, have also increased their assets, each now exceeding $2 billion. Having founded AQR in 1998 after working at Goldman Sachs Asset Management, all three actively invest in AQR funds, linking their financial well-being to the company's success.
The main multi-strategy fund, Apex AQR, managing assets of $6.7 billion, achieved a return of 19.4% last year. Similarly, the long-short fund Delphi, with comparable assets, demonstrated a return of 16.7%. An anonymous source noted that the average annual return of both funds over the past five years is 16.6%. In comparison, the S&P 500 index achieved 14.4% annual growth during the same period. Among more than 20 open-end mutual funds of AQR, the market-neutral fund, managing assets of $3.2 billion and approximately two thousand positions, grew by 26.5% in 2025, with an average annual return of 19.6% over the past five years, while similar funds show around 8%.
If AQR continues in the same vein, it may soon break its record from 2018 when it managed $226 billion. This impressive growth has been achieved by a company that just four years ago managed less than $100 billion and faced challenges with efficiency and client outflows.
Significant changes at AQR have occurred against the backdrop of the implementation of artificial intelligence technologies and the active use of machine learning for analysis and trading. Previously, AQR used traditional methods and value investing metrics, such as the price-to-book ratio and return on equity, to identify undervalued or overvalued stocks. Today, this task is addressed using machine learning, allowing for the identification of complex relationships between factors, real-time adjustment of their weights, and processing large volumes of data in search of trading signals. For market research, analysts use natural language processing technologies, which enhance the models.
Asness and Liu were trained by Eugene Fama, a Nobel Prize-winning economist and professor at the University of Chicago. Although AQR was a late adopter of AI, companies like Renaissance Technologies and D.E. Shaw had already surpassed it in this area. In 2018, AQR was the first to establish the position of head of machine learning, but this specialist worked for only seven months. He was succeeded by Brian Kelly, a finance professor at Yale University, who gained attention in the investment world. In December 2021, Kelly co-authored a significant research paper claiming that complex machine learning models provide more accurate stock return forecasts than simpler ones. Despite criticism from academics, AQR supported Kelly's findings, asserting that their research was conducted correctly.
Later, Asness himself became an active proponent of AI, stating that AQR "delegates more and more tasks to machines," and that artificial intelligence, according to him, could take his place. Despite this, company employees assert that AI and humans work as a team. "AI and machine learning technologies really help us achieve our goals, but this is not a revolution; it's an evolution," emphasizes one of them.
Nevertheless, "revolutionary" changes are occurring in the less visible part of the business—distribution, where AQR seeks to meet the growing demand from financial advisors needing tax-advantaged funds. This new client base has become a major source of capital inflow for the company, unlike traditional clients such as pension funds. The CEO of Affiliated Managers Group, which holds a minority stake in AQR, recently noted that the advisor client base provides "significant and organic capital growth," and his own company, with a net annual income of $51 billion, "is largely indebted to AQR."
Particularly notable is the growth in individually managed accounts using Flex, AQR's investment tool for long and short positions aimed at advisors and affluent clients. Such a tax-advantaged portfolio buys stocks expected to rise in price and shorts stocks likely to fall, aiming to profit from both sides. This tool also minimizes market fluctuations and limits taxable payouts, allowing investors to keep more funds after taxes. According to the official website, a year ago, Flex managed $23.2 billion, and within nine months, this amount nearly doubled to $45.4 billion, accounting for almost a quarter of all AQR assets.
According to Justin deTray, an advisor at the consulting firm WealthSpire in San Francisco, which manages $580 billion in assets, Flex attracts registered investment advisors due to low fees and a good reputation that new players cannot boast. Additionally, there are several long-term trends: newly minted tech millionaires are looking to preserve their capital after a long stock market rise. "Many potential clients have unrealized gains in the stocks of the 'Magnificent Seven' or hyperscalers, and these are indeed significant amounts," asserts deTray, based on his experience. "AQR has excellent positions and every chance to occupy this niche."
Can AQR maintain its pace? A volatile market often plays into the hands of hedge funds and quantitative companies. However, AQR's future depends on whether its models can outperform the market in the coming years, as well as the actions of other hedge funds that are also actively implementing quantitative strategies using AI.
The post How three billionaire investors doubled their fortunes in a year thanks to AI first appeared on K-News.
