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How Tax Strategy for the Rich Built the Biggest Hedge Fund
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Subscribe07 AUG 2026 / FINANCE
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AQR Capital Management has successfully used a tax-aware long-short investment strategy to increase its value from under $100 billion in 2022 to over $140 billion by the end of 2025, making it the world's largest hedge fund. The firm, co-founded by Cliff Asness, grew its long-short tax strategies from approximately $3 billion to $70 billion within three years by creating more harvestable losses for tax offsets while growing the overall portfolio, offering an appealing strategy for the ultra-wealthy looking to lower their tax bills. However, there are increasing concerns about the strategy's resistance to regulatory scrutiny and potential changes to tax law.
Imagine telling a room full of accountants that a portfolio can make investors richer while producing enough losses to lower taxes elsewhere. Half the room would reach for coffee. The other half would ask for the footnotes. That, in plain English, is the...
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