Gains come even as most hedge funds underperform S&P 500 index amid lackluster performance
The world’s 25 best-paid hedge fund managers earned a combined total of $11.2 bn last year, according to a study by Institutional Investor’s Alpha (II Alpha). And that’s down 45 percent on the previous year.
Despite a performance that disappointed many major investors, average earnings among the top 25 totaled $467 mn last year, from $846 mn in 2013, the study shows. The median earner, meanwhile, made $400 mn last year, compared with $465 mn the year before.
The HFRI Fund Weighted Composite Index, the broadest measure of hedge fund performance maintained by industry research firm Hedge Fund Research (HFR), showed a gain of 3.3 percent last year, from about 9 percent the year before and 6 percent in 2012. The S&P 500 index, meanwhile, rose 11.4 percent last year, 29.6 percent the year before and 13.4 percent in 2012.
Ken Griffin, CEO and founder of hedge fund Citadel, tops the 2014 list, earning $1.3 bn in fees and gains on his own capital. He has now appeared on the top 25 list for 13 of the 14 years of the list’s existence, according to II Alpha.
James Simons, the only person to make the list all 14 years, comes second with earnings of $1.2 bn from his position as founder of Renaissance Technologies. II Alpha says he no longer manages the day-to-day affairs of his firm and spends most of the year on his yacht.
Bill Ackman, the activist investor who heads Pershing Square Capital Management, comes fourth on the 2014 list with $950 mn, though his portfolio registered the biggest gains of all the managers on the top 25 list, with gains of about 40 percent.
Appaloosa Management’s David Tepper, who has led the list for the last three years, falls to the 11th spot in 2014 due to his portfolio’s gains of 2.2 percent, the worst performance of any manager on the list this year.
