From Alpha Magazine via the NYT, comes the latest list of earners, in order of 2008 take home pay.

Unlike the weasels who ran Merrill, Morgan, Bear & Lehman into the ground, then grabbed the cash and ran, these boys actually made their money the old fashioned way: They earned it, via outperformance.

Read ‘em & weep:

Rank: 1
James Simons
Renaissance Technologies
Est. 2008 earnings: $2.5 billion
Est. 2007 earnings: $2.8 billion

Rank: 2
John Paulson
Paulson & Company
Est. 2008 earnings: $2 billion
Est. 2007 earnings: $3.7 billion

Rank: 3
John D. Arnold
Centaurus Energy
Est. 2008 earnings: $1.5 billion
Est. 2007 earnings: $480 million

Rank: 4
George Soros
Soros Fund Management
Est. 2008 earnings: $1.1 billion
Est. 2007 earnings: $2.9 billion

Rank: 5
Ray Dalio
Bridgewater Associates
Est. 2008 earnings: $780 million
Est. 2007 earnings: $400 million

Rank: 6
Bruce Kovner
Caxton Associates
Est. 2008 earnings: $640 million
Est. 2007 earnings: $100 million

Rank: 7
David Shaw
D.E. Shaw & Company
Est. 2008 earnings: $275 million
Est. 2007 earnings: $210 million

Rank: 8
Stanley Druckenmiller
Duquesne Capital Management
Est. 2008 earnings: $260 million
Est. 2007 earnings: Not available

Rank: 9 (tie)
David Harding, left
Winton Capital Management
Est. 2008 earnings: $250 million
Est. 2007 earnings: $225 million

Rank: 9 (tie)
John Taylor Jr., right
FX Concepts
Est. 2008 earnings: $250 million
Est. 2007 earnings: Not available

Rank: 9 (tie)
Alan Howard, not pictured
Brevan Howard Asset Management
Est. 2008 earnings: $250 million
Est. 2007 earnings: $245 million

>

Sources:
Group Brother, Can You Spare a Billion? The Top 25 Moneymakers
Stephen Taub
Alpha, March 25, 2009

http://www.iimagazine.com/Alpha/Articles/2165684/TODAY/Brother,_Can_You_Spare_a_Billion?.html

Things are tough all over

http://www.ritholtz.com/blog/2009/03/big-hedge-fund-money/

See also:
Top Hedge Fund Managers Do Well in a Down Year
LOUISE STORY
NYT, March 24, 2009

http://www.nytimes.com/2009/03/25/business/25hedge.html

Hedge-Fund Pay May Fall 25% in 2009 as Fees Evaporate
Katherine Burton
Bloomberg, March 25, 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJEKqMJXSP.E&

Category: Hedge Funds, Markets, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

37 Responses to “Top Hedge Fund Earners”

  1. And no, I do not have a problem with this concentration of wealth.

  2. jonpublic says:

    I bet I paid a higher percentage of my income in taxes than these guys.

  3. Trainwreck says:

    Has this list been vetted by the FBI or the House of Representatives? Hmm?

  4. xnycpdx says:

    what the hell do you do with that much money? i mean, most entities with cash like that have a navy or sumpin’…

  5. blackbox says:

    hah, perfect timing for obama’s call for more control over non-bank entities… this won’t last much longer.

  6. Simon says:

    Ha Ha I earned $300 today! suck that up boys…

  7. I wonder if we’ll hear about any “Pension Funds” that were invested in Funds, like these, that, actually, showed + results?

    as an aside, with so much ‘leverage’/debt about, I can’t believe peeps are surprised by the level of Volatility.

    and, the knee-jerk equation of ‘volatility’ to losses..

    past that, assuming these catz were ‘playing cricket’, then, by Jiminy, it’s all well and Good.

    though, sadly, this isn’t– http://www.commondreams.org/views03/0912-04.htm

  8. KellyD3 says:

    Note that James Simons (and some of his staff) and The Big Picture are both from (faculty and student, respectively) SUNY Stony Brook.

  9. I had a very brief overlap with Jim Simons at SUSB — he was the outgoing chairman of the mathematics department, and I was freshman Mathematics /Physics student.

  10. VennData says:

    “…the rest of us can’t afford to demonize every investor or entrepreneur who seeks to make a profit.”

    — Barack Obama, US President (March 25, 2009)

  11. super_trooper says:

    “They earned it, via outperformance”
    Did they even make money for their clients?
    Did they outperform the money in my mattress?

  12. ben22 says:

    Simons once studied sun spots and if it had an impact on the markets, he was asked about this in a Bloomberg mag. a few years ago and would not answer what he had found.

    He really is a an amazing guy and an amazing mind if you know much of anything about him.

    Oh, and to one of the questions above, yes, they all outperformed the money in your mattress, ….by a mile.

  13. shoeless says:

    I have a problem with Simons in 2008. His Medallioin fund (his and his partner’s money) earned 85%, while the crap he peddled to outside investors was down bewteen 10% and 20% depending on the product. The others, I beleieve, all made money for clients in 2008.

  14. super_trooper says:

    Noticed in the NYT article “To make the cut this year, a hedge fund hotshot needed to earn $75 million, down sharply from the $360 million cutoff for 2007’s top 25.”

  15. Siggyboss says:

    Where are the percentage returns for 2007 and 2008? It’s great they made money during tough times, but the percentage leader should take the gold.

  16. danm says:

    xnycpdx:

    It sure helps get insider information + a spot at the bargaining table.

  17. danm says:

    And no, I do not have a problem with this concentration of wealth.
    ————
    I have a problem with it… I believe that it helped lead to the current crisis. How can someone making peanuts (government officials) not fold to the desires of these billionaires?

    Then you have all the others trying to emulate them, thinking that if they try hard enough (usually using leverage) they can achieve the American dream.

    You can argue that derivatives help the markets but in the last decade it contributed to the largest misallocation of capital ever.

    Furthermore, I think it’s disgusting that Paulson benefited from the bursting of the real estate bubble when, as Secretary of Treasury, he should have been looking out for the well being of American households.

  18. scorpio says:

    ha! wrong Paulson. that’s John, not Hank. and John Paulson made his money the old-fashioned way, he earned it, unlike Hank, who sat on top of a giant well-connected multi-tentacled government-subsidized feeding machine.

  19. mike j says:

    Is danm a troll?

    Maybe, but just in case: John Paulson, hedge fund manager is NOT Henry Paulson, former Secretary of Treasury.

    -Mike J

  20. NJlou says:

    Hapless Americans struggling with too much mortgage debt ( no money down, interest only, adjustable rate, no income verification) in their artificially inflated homes, credit cards, pay-day loans, 6-year car loans, home equity loans and student loans debts are finally asking themselves HOW did these banksters/fraudsters manage to convince the public that they (the banksters) should get to keep all the wealth (exploited from some debt scam) while Americans struggle to pay bills?

    Americans are finally waking up to ways in which they have been extorted by clever debt schemes and now left impoverished.

    Cleverly, Americans simply abandoned their worthless homes or defaulted on their debt en masse something the banksters never expected. The stupid bankers really thought that the mere threat of a lowered credit score rating would be enough to keep the debt slaves paying their unsustainable debts.

    I think Fox News and CNBC (the grand casino ) calls it ‘class warfare’ as they shill for the banksters. It is all quite humorous.

    The traitors in Congress took the dirty shekels from the bankers who later turned around and blackmailed them int0 bailing out the insolvent banks and insurance companies, while the homeowners suffered.

    The civil war is about to begin… Congress will be surprised at the fury all this is about to unleash.

  21. HCF says:

    I never understood why so many people have such a hard time distinguishing difference:

    Make lots of money for investors with 100% private capital -> Deserves every penny he earns
    Loses lots of money and subsidized by you, me, and our Uncle Sam -> Deserves jack-f***ing shit….

    Whether you “need” the money is not the issue…. It should never be a class warfare thing, just a war on incompetency and corruption.

    HCF

  22. danm says:

    Make lots of money for investors with 100% private capital -> Deserves every penny he earns
    Loses lots of money and subsidized by you, me, and our Uncle Sam -> Deserves jack-f***ing shit….

    ——————–
    A lot of this hedge fund stuff was “subsidized” by the low rates and the credit bubble.

    If America had been managed properly, a lot of these hedge funds wouldn’t exit. And don’t get me started on the shadow banking system.

  23. danm says:

    As for Paulson you’re right, I instantly went on my high horse without looking at the names properly… Sorry, I did not stick to the list as I was simply focusing on people who got filthy rich (concentration of wealth) using derivatives of some sort. And Paulson (GS) did participate in the real estate mess and as Secretary of Treasury had the audacity to tell Americans that everything was fine.

    Wall Street got most of this 100% private capital from all of America’s pockets in the form of leverage with low rates… and now all of Amercia is paying for its sins.

    You can call it 100% private capital. I call it a subsidy from all Americans to Wall St disguised as private capital.

  24. I don’t have a problem with them making that kind of money either. Capitalism should be about rewarding people for deriving value for other people. Above a certain level though there is no real and extra benefit from the dollars you earn and you are probably just doing it for the fun or thrill of it. Thus, I would tax them at a very high rate for earning that kind of money. Somewhere north of 75% above 10 million or so. Then we’ll see what they are really doing it for because they really don’t need many nickles when they are at that level.

    You don’t want to tax it all away because if they have talent then you want to hook the ox cart up to them for the benefit of the system. There is a balance there somewhere I believe

  25. HTCMSI,

    Equal in the eyes of the Law=Flat Tax.

    Who, among us, deserves any more from us, than any other of us?

  26. icm63 says:

    I GUESS last year MADOFF would be on the list, and I assume that with the lax audit standards and SEC policing, whos to know that any of the above dont have PONZI as a second name. Auditors should be rotated every three years.

  27. Who, among us, deserves any more from us, than any other of us?

    Not everyone’s daddy sends everyone to Harvard. And unless you grovel at the feet of debt you are not going to get many big breaks in today’s economy. Not at all if you are in a certain underclass that can’t qualify for a loan even if you do have the talent. Those are the people society is depriving themselves from with this skewed playing field

    A basic fact is that some are born on the top of the heap and others are born under it. That is a big reason why some of the classes are perpetuated. Especially in this new age of nepotism. If you want proof look at many of today’s crop of stars in Hollywood verses the stars in sports. One of them is predominantly talent based. The other is filled with the children of those at the top. That is similar in many other areas. Banking, politics etc. etc. Whereas in sports, if you can’t put the biscuit in the basket it doesn’t matter who your daddy is.

    It doesn’t bother me much but I do ache for those I see who never had or will have a break in life. I earned my degree in the school of hard knocks myself and have put in my decades to get where I am(but it did take decades due to my starting point in life). I do consider myself an above average thinker though and that has a lot to do with my success. I’d be millions more ahead though if my talent had been plugged into the right training and capital much earlier on. And for that we all lose. Me, the tax man and the charities I have devoted my life to helping

  28. danm says:

    Whereas in sports, if you can’t put the biscuit in the basket it doesn’t matter who your daddy is.
    ——
    If you read Malcolm Gladwell’s latest book, Outliers, you’ll find out that the sports arena is just as screwed up as anything else. It has a lot to do with your birth date and there is as much lost talent there as anywhere else!

    In fact our whole notion of succes is screwed up.

    Life is not fair and I’m sick and tired of people saying that people with billions “deserve” their billions when their contribution to the well being of society is questionable.

  29. Urkel says:

    What the hell. These dudes are bringing up the average. What’s the rest of us supposed to do?

  30. HTCMSI,

    ya know, you might want to SWAG a NPV of the negative annuity you’ve been puking into the ‘tax man”s many pails..

    or, IOW, forget the starting point, it’s a the ‘tax man’ greasing the slope of your upward climb..

    LSS: if one actually received, by the time it got to the table, 4/4 of the sandwich they ordered–I’d be betting we’d be witnessing a whole lot more ‘sharing’ going on. as it is, now, we see ‘shearing’–with the justification: “Hey, somebody’s got to pay the (tax) bills”

    while you’re in SWAG-mode, take a guess as to how many ‘correct’ answers there are to your 1040 exercise..don’t worry, though, even the IRS can’t tell you..

  31. if one actually received, by the time it got to the table, 4/4 of the sandwich they ordered–I’d be betting we’d be witnessing a whole lot more ’sharing’ going on.

    Then you clearly have no understanding of human nature do you?

    Last time I did the math I think it worked out to about 70 billion a year to keep every child in the world from starving to death. That’s not a lot of money. A fraction of a percent of ‘western’ world income. Mere pocket change and a lot less than people spend on their ‘toys’. This whole mess isn’t a tax issue or a money issue. It is an issue of the heart. Until that gets fixed, it doesn’t matter how much or little money you give to or take from your fellow man, it won’t ever be enough

    That’s all right with me though. I know the scales will balance in the end. So I’ll just worry about what I can do to fix the problem and pray for those who can but refuse to

    Peace to you

  32. HTCMSI,

    “Last time I did the math I think it worked out to about 70 billion a year to keep every child in the world from starving to death.”

    care to guess the cost, on our Economy, for complying with a Tax Code of >50 000 paginas?

    A. 70 000 Million

  33. A. less than 70 000 Million.
    B. more than 70 000 Million.

    WP doesn’t like those ‘less than’/'greater than’ signs..

  34. “It is an issue of the heart. Until that gets fixed, it doesn’t matter how much or little money you give to or take from your fellow man, it won’t ever be enough”

    that, though, to me, needs to be coupled w/ this: “the scales will balance in the end.”

    and, to balance the scales, we need our Heart, and our Mind, to be engaged..

    but, you’re right, we each need to be the change we care to see. no ballot, no bullet, no bollocks, can delivery it for you.

  35. care to guess the cost, on our Economy, for complying with a Tax Code of >50 000 paginas?

    I agree with you on the tax code. I once favored a sales tax only for simplifying things. It would take a ton of people off the rolls saving countless person-hours of compliance. It would also encourage savings over spending. I wouldn’t miss it myself and it would give me back the one weekend per year I waste trying to get some of my own cash back. I doubt that will ever happen though. BTW I’m a Canadian so it doesn’t cost me anything to comply with US tax code. :) Because we are so close to you that is why many of my posts appear to be speaking from a US perspective but I’m just looking over the fence and of course the net has opened borders now more so than ever.

  36. steel breeze says:

    Maybe these people earned their money or maybe not. Private wealth does not bother me, and tax policy should not be based upon limiting private wealth or redistribution.

    However, I would make the point that one alledged benefit of capitalism is the efficient allocation of capital. If capital is increasingly concentrated in fewer entities then the decisions regarding capital allocation are more centralized. What is the effect of this? Can wealth be too concentrated?

    This raises the issue of government regulation. In light of current events, we ask can hedge funds be too big to fail? If so, must they be regulated? Regulation requires some degree of transparency. Can a hedge fund be regulated?

    damn, now my head hurts …

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