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The 10 best-paid hedge fund managers made $7.7bn in 2018
The figures are more than almost anyone will earn in a lifetime.
Hedge fund mogul Kenneth Griffin. Picture: Bloomberg
Even for this Gilded Age of 0.0001 percenters, Kenneth Griffin drips money.
The hedge-fund mogul recently closed on a New York penthouse for an eye-watering $240 million. Before that he picked up a $122 million London mansion. He can hang his $200 million Pollock in one and his $300 million de Kooning in the other.
Remarkably, all of that cost less than what Griffin made in 2018, when his personal fortune swelled by $870 million to about $10 billion, according to the Bloomberg Billionaires Index, a ranking of the worlds 500 richest people.
More remarkable is how Griffin and many other hedge fund giants mint so much money: with investment returns that are solid, but a far cry from John Paulsons mammoth housing short or when George Soros broke the Bank of England.
The Bloomberg Billionaires Indexs inaugural ranking of hedge-fund wealth lays bare a truth about the business that, for many, defines what it means to be rich.
Outfits like Griffins Citadel and Ray Dalios Bridgewater Associates have grown so big by assets that theyve effectively become printing presses for their ultra-rich owners. These funds now throw off millions or billions of dollars a year in management fees.
We still want the mega funds to produce returns that are better than a typical hedge fund, thats why were willing to pay the 2 and 20 percent fees, said Tim Ng, CIO of Clearbrook Global Advisors, which invests in hedge funds. Were willing to tolerate lower performance from some in a market like 2018 because they have for years outperformed their peers.
Bloomberg reached out to representatives for all of the firms and individuals on the list. All declined comment.
The top hedge-fund earners of 2018 performed significantly better than the average manager.
Citadels flagship Wellington fund, for instance, returned 9.1% last year, while the average fund lost 6.7%, slightly worse than the S&P 500 Index.
Quants feature heavily on Bloombergs list, led by James Simons of Renaissance Technologies. The former code-breakers fortune increased $1.6 billion to $16.6 billion, according to Bloomberg estimates, making him the worlds wealthiest hedge fund manager.
RenTechs Institutional Equities Fund gained 8.5%, while its Medallion vehicle, closed to outside investors, did better.
Ray Dalios fortune rose $1.3 billion, powered by Bridgewaters approximately $160 billion of assets.
Hes now worth about $16.2 billion. His flagship Pure Alpha fund gained 14.6% last year, while the All Weather strategy lost money.
Michael Platt of Bluecrest Capital Management returned 25%, although hedge fund investors didnt benefit after he kicked out clients. Jeff Talpins of Element Capital Management had a 17% gain for his macro fund, elevating him to billionairedom.
For several people on the list, hedge funds are just a component of their businesses.
Griffin owns one of the worlds largest firms making markets in stocks and bonds. In addition to buying houses and art, hes given away more than $700 million to charity.
Chase Coleman of Tiger Global Management runs a fabulously successful venture capital arm, helping to boost his fortune to $3.9 billion.
The figures are more than almost anyone will earn in a lifetime, but 2018 wasnt a particularly good year for the industry. Closures outnumbered launches in 2018 for the third year in a row, according to Eurekahedge, and investors continue to pressure managers to cut their fees.
To compile the ranking, Bloomberg broke out total income figures to show estimates of dividend income and return on personal assets. Dividend income is our calculation of the share of performance fees that the manager takes home as owner of the hedge fund. Return on personal assets is our estimate of how much managers earned on their own cash invested in their funds.
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