February 26, 2013

Top 40 hedge fund managers earn total of $16.7bn

The top 40 hedge fund managers in the world personally earned a total of $16.7bn (£11bn) last year, according to a Forbes list that underscores the extraordinary power of the high-rolling industry.
Michael Hintze of CQS earned $350m last year making him the highest ranked London-based fund manager on the Forbes list of top 40 best paid hedge fund managers in the world.

David Tepper who runs New Jersey-based Appaloosa Management earned $2.2bn, according to the list. Sometimes described as the best investor of all time, Mr Tepper’s $15bn fund returned another 30pc last year.

The best performing London-based manager was Michael Hintze of CQS Management. The Tory donor and philanthropist earned $350m after generating 36pc returns on his flagship fund.

Mr Hintze, who is a key sponsor of London’s Victoria & Albert Museum, has credited the Bank of England’s quantitative easing programme as key driver of the stock market rally. The Bank has pumped £375bn of money into the economy since the start of its QE programme in 2009.

Mike Platt, founder of BlueCrest Capital Management, was the only other London-based fund manager in Forbes’ top 20. The former JP Morgan banker earned $225m.

Alan Howard, co-founder of Brevan Howard, is listed at 21 with earnings of $200m. Mr Howard moved the hedge fund’s headquarters from London to Geneva in 2009.
If they were a country, the 40 highest earning managers would have the 111th biggest GDP in the world.

The top five on Forbes’ list are all well-know veterans of the industry who together earned $7.8bn of the total.

After Mr Tepper, Carl Icahn, the 77-year-old boss of Icahn Capital, is second on the list with earnings of $1.9bn.

He is followed by Steve Cohen, 57, of SAC Capital Advisors who shrugged off a federal probe in insider trading, to generate 25pc returns and a $1.3bn payday for himself.

The “Quant King” James Simons of Renaissance Technologies earned $1.3bn too while George Soros, 82, earned $1.1bn. In January Mr Soros told The Daily Telegraph that the markets should bet against the pound.

The highest 10 managers earned a total of $11bn and included David Shaw of DE Shaw and Daniel Loeb of Third Point who recently made $500m on betting on Greek debt.

The performance of the best funds contrasts with an otherwise difficult year for hedge funds. Managers outside the “masters” category struggled during 2012.

The HFRX, a widely used measure of industry returns, is up by just 3pc over the past year, compared with an 18pc rise in the S&P 500 share index.

At the end of last year, SS&C, an American hedge fund administrator, said investors pulled money out of hedge funds faster than at any time since 2009.

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