- Five hedge fund titans each took home more than $1B in pay.
- However, only two of those outperformed the broader market.
- One billionaire even retired more than 10 years ago.
2019 was, for the most part, a good year for investors, but an even better year for a select few hedge fund managers. According to a Bloomberg report, five hedge fund managers took him at least $1 billion — and not all of them outperformed the broader market.
The Top Five Earners
Bloomberg made several assumptions in determining how much hedge fund managers earned in 2019. A typical compensation within the hedge fund universe is a 2% flat management fee on assets under management and a 20% commission fee on all profits.
TCI Fund Management’s Chris Hohn likely earned the most within the hedge fund industry in 2019. His main fund recorded a 41% return compared to the S&P 500 which gained 29% last year. His take-home pay was around $1.845 billion.
Renaissance Technologies’ Jim Simons main hedge fund underperformed the S&P 500 index with a 14% return but he still took home $1.73 billion, despite stepping down from day-to-day management in 2009. Citadel’s Ken Griffin ranked the third most compensated fund manager at $1.5 billion while his fund performed slightly better than Simons’ at 19%.
Point72 Asset Management’s Steve Cohen’s main fund earned a 16% return and he was compensated with $1.26 billion in pay. It should be noted that Point72 is a family office and was born out of the former hedge SAC Capital Advisors.
Finally, Tiger Global Management’s Chase Coleman was rewarded with $1.105 billion in pay for outperforming the S&P 500 index with a 33% return.
How The Big Winners Won Big
Hohn manages a London-based activist investment hedge fund but he benefited mostly from investments in Alphabet, Microsoft, and Canadian rail companies, according to Bloomberg.
Simons, an 81-year old industry veteran, scored a large payday through his ownership stake in the hedge fund he founded four decades ago. The Renaissance Technologies fund had $75 billion worth of assets and Simons has heavy exposure to the firm’s highly-secretive and mostly employee-only Medallion fund.
Griffin’s pay estimate doesn’t include profit earned in his market-making business called Citadel Securities which raked in billions more in revenue, Bloomberg noted.
All put together, the top 15 best-compensated hedge fund managers combined for $12 billion dollars in pay. Put in perspective, the group of barely a dozen individuals collectively earned more than all 56,000 J.P. Morgan investment bankers earned.
The 15 fund managers could also, in theory, pay back every penny Las Vegas gamblers lost last year and still have close to $6 billion left in the bank.