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Richest hedge fund managers get richer |
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Tuesday, 10 April 2007 |
Five of the wealthiest took home $1 billion or more each as the 100 best-paid managers earned an average $241 million, according to a published report.
The wealthiest U.S. hedge fund managers and traders became a lot richer last year when five of them took home $1 billion or more each.
John Arnold, a newcomer to the exclusive club of top industry earners, banked an estimated $1.5 billion to $2 billion in 2006 for having coolly and correctly called the direction of natural gas prices, according to a study compiled by magazine Trader Monthly and released Monday.
Arnold, a 33-year old former Enron trader, delivered an eye-popping 317 percent before fees to investors in his hedge fund Centaurus by taking the other side of a bet that felled Amaranth Advisors last September, the magazine said.
Arnold's returns helped him muscle past mathematician-turned-investor James Simons of Renaissance Technologies Corp., ESL's Edward Lampert, veteran oil trader T. Boone Pickens and SAC Capital Advisors' Steve Cohen, who each made at least $1 billion.
Simons, Lampert and Pickens have ranked among the top three earners since magazines such as Alpha and others started tracking their paychecks.
A hedge fund superstar
The 100 best-paid managers earned an average $241 million, Trader Monthly reported. This is more than double the $110 million the 25 best-paid managers earned in 2002, according to a different survey.
Hedge funds are loosely regulated investment pools where assets have more than doubled to $2 trillion in the last three years as wealthy individuals are joined by pension funds and endowments as investors.
The best-paid hedge fund managers delivered returns of 30 percent and 40 percent last year, but the average hedge fund's returns were decidedly more meager at roughly 13 percent, according to Chicago-based performance tracker Hedge Fund Research Inc.
Last year, hedge funds returned only slightly more than the average U.S. stock mutual fund which gained 12.4 percent, but costs a lot less, according to data from Lipper Inc., a unit of Reuters.
Simons' fund, for example, is among the most expensive in the industry charging a 5 percent management fee and a 44 percent performance fee. Arnold's fund charged a 3 percent management fee on top of a 30 percent incentive fee, the magazine reported.
The list of top earners also included Robert Soros, who has taken over for his father George; Stanley Druckenmiller, who helped Soros earn billions; Jim Chanos, who was among the first to spot trouble at Enron; and William Ackman, who has successfully pushed for corporate change at companies such as Wendy's International and McDonalds.
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Last Updated ( Thursday, 26 April 2007 )
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