AQR Capital Management, a quantitative investment firm based in Greenwich, Connecticut, experienced significant growth in 2025, benefiting from a strong year for hedge funds and quantitative investment strategies. The firm concluded the year with $187 billion in assets under management, equivalent to approximately €163 billion. This represents a $73 billion, or roughly €63.6 billion, increase in assets throughout the year.
The firm’s performance directly impacted the wealth of its three founders. Cliff Asness, AQR’s Chief Investment Officer and largest individual shareholder with an estimated 30% stake, now holds a fortune valued at $6.3 billion, or about €5.5 billion, placing him at number 664 on the global billionaire list. Cofounders John Liew and David Kabiller also saw their net worth exceed $2 billion, approximately €1.74 billion each.
Asness, Kabiller, Liew, and Robert Krail established AQR in 1998 after working together at Goldman Sachs Asset Management. The founders have maintained a substantial portion of their personal wealth invested in AQR’s funds, directly linking their fortunes to the company’s investment strategies.
Two of AQR’s flagship funds delivered particularly strong returns in 2025. The Apex multi-strategy fund, with $6.7 billion in assets (approximately €5.8 billion), achieved a 19.4% return. The Delphi fund, employing a long-short strategy with the same asset volume, posted a 16.7% return, according to a source familiar with the results.
Over the past five years, both funds have averaged an annualized return of 16.6%. For comparison, the S&P 500 index delivered an annualized return of 14.4% over the same period.
Among AQR’s two dozen-plus open funds, the AQR Equity Market Neutral Fund stood out with exceptional performance. Managing $3.2 billion (approximately €2.8 billion) and holding around 2,000 positions, the fund appreciated by 26.5% in 2025. Its five-year average annual return reached 19.6%, while most comparable funds averaged around 8%.
If AQR maintains its current growth trajectory, it could approach its historical peak of $226 billion (approximately €197 billion) in assets under management, achieved in 2018. This would mark a significant turnaround for the firm, which managed less than $100 billion (roughly €87 billion) just four years ago, following a period of underperformance and investor outflows.
Firm’s Recovery Coincided with Increased Focus on Artificial Intelligence
AQR’s recovery has coincided with a greater emphasis on Artificial Intelligence (AI) and the deliberate expansion of machine learning (ML) techniques. Historically, AQR relied on a factor-based investment approach, utilizing classic value investing metrics—such as the price-to-book ratio or return on equity—to identify potentially undervalued or overvalued stocks. Weighting these factors was primarily driven by human analysis.
The integration of machine learning models has partially automated this process. Algorithms can identify complex interactions between factors, recalibrate their weights in real time, and analyze large datasets for predictive signals. In research, natural language processing tools—similar to those used in systems like ChatGPT or Claude—assist analysts in examining vast amounts of information to improve forecasting models.
AQR’s adoption of these technologies came later than some rival quantitative firms, such as Renaissance Technologies or D.E. Shaw. The firm hired its first head of machine learning in 2018, but that tenure lasted just over seven months. His successor, Brian Kelly, a finance professor at Yale University, had a more lasting impact.
In December 2021, Kelly co-authored a 141-page academic study titled “The Virtue of Complexity in Return Prediction.” The study concluded that more sophisticated machine learning models outperform simpler models in predicting stock returns and constructing investment portfolios. Some academics have challenged these conclusions in subsequent studies, arguing that the paper was based on a limited dataset. AQR defended the study and continues to support its findings.
Recently, Cliff Asness himself has become a vocal proponent of artificial intelligence within the company, stating that AQR has “surrendered more to the machine” and suggesting that AI could even threaten his own position.
However, internal sources emphasize that technology has not replaced human input in the investment process. As one person connected to the firm noted, “Machine learning and artificial intelligence are clearly bringing benefits to our process, but they represent an evolution, not a revolution, in what we do.”
While technological advancements strengthen AQR’s investment models, recent growth has also been driven by distribution. The firm has benefited from increasing demand from financial advisors seeking tax-efficient products for high-net-worth clients.
These investors have recently surpassed AQR’s traditional institutional client base, such as pension funds or foundations. The CEO of Affiliated Managers Group, which holds a minority stake in AQR, stated in an earnings presentation that the client base linked to financial advisors is “driving significant organic growth,” adding that the group’s $51 billion (approximately €44.4 billion) in net inflows in one year were “primarily driven by AQR.”
The Flex separately managed accounts have been a major contributor to this growth. This is a long-short investment vehicle designed for advisors and high-net-worth clients. The strategy involves buying stocks AQR believes will appreciate and betting against those it anticipates will decline, aiming to profit from both movements while reducing market volatility and limiting taxable gains distribution.
A year ago, the Flex accounts managed $23.2 billion, approximately €20.2 billion. Nine months later, that figure nearly doubled to $45.4 billion, roughly €39.5 billion. By the end of 2025, they already represented nearly a quarter of all assets managed by AQR.
Justin deTray, a financial advisor at WealthSpire, a financial advisory firm with approximately $580 billion in assets under advisement (roughly €505 billion), explains that the product is attracting a growing number of registered independent advisors, known as RIAs. According to deTray, AQR benefits from lower fees and a well-established reputation in the industry.
There is also a favorable structural context. The prolonged rally in the U.S. Stock market has created a fresh generation of millionaires in the technology sector who are now seeking strategies to preserve their accumulated wealth. As deTray describes it: “There are many potential clients sitting on enormous unrealized gains in companies like the ‘Mag Seven’ or the major technology infrastructure providers.”
AQR’s future performance will now depend on its models’ ability to continue outperforming the market and competition, as an increasing number of hedge funds and quantitative investment firms also integrate AI-based strategies.
Original text here. Article translated and edited by Paulo Marmé.
