Ken Griffin’s Citadel made $16bn profit for investors last year, the biggest dollar gain by a hedge fund in history and a haul that establishes his company as the most successful of all time. Citadel, which manages $54bn in assets, made a 38.1 per cent return in its main hedge fund and strong gains in other products last year, equating to a record $16bn profit for investors after fees, according to research by LCH Investments, run by Edmond de Rothschild.

The profit, which was driven by bets across a range of asset classes including bonds and equities, surpasses the roughly $15.6bn made by John Paulson in 2007 through his bet against subprime. Last year’s huge sell-off in government bonds provided a highly attractive trade for many macro managers, helping them to their biggest gains since the onset of the global financial crisis.

Citadel, which Griffin set up in 1990, made a total gross trading profit of about $28bn last year, meaning that it charged its investors – one-fifth of whom are its own employees – roughly $12bn in expenses and performance fees. The huge fee highlights how many investors tolerate hefty so-called pass through expenses – variable charges covering a range of items including trader pay, technology and rent – if net returns are high. Such charges tend to be higher during periods of strong returns because traders’ pay is linked to performance.

The $16bn of gains for investors means Griffin’s Citadel replaces Ray Dalio’s Bridgewater, which for seven years had been the all-time most successful hedge fund, at the top of LCH Investments’ list of the top money managers. ICH’s numbers do not include Griffin’s Citadel Securities market making operation.