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Even though many hedge funds earned only
lackluster returns last year and sharply trailed the S&P 500's
30 percent gain, it was a banner year for a small number of
hedge fund managers, according to Institutional Investors'
Alpha's 13th annual ranking of the industry's best paid
managers.
Tepper, who runs Appaloosa Management, was followed in second
place by Steven A. Cohen, who earned $2.4 billion.
For Cohen it was a bittersweet end to his decades as a hedge
fund manager which ended when his SAC Capital Advisors pleaded
guilty to insider trading. The deal with the government forced
him to stop managing money for outsiders and turn his operation
into a so-called family office.
Investors who run family offices no longer qualify for this
list, which explains why George Soros and Carl Icahn no longer
make appearances.
The industry's 25 best paid managers earned $21 billion between
them, roughly 50 percent more than they earned in each of the
previous two years, the list showed.
John Paulson, who ranked first on the list twice when his
Paulson & Co scored big gains in prior years on a bet against
overheated mortgages and on gold, came in as the third-highest
earner with $2.3 billion in pay.
James Simons, a retired mathematician who ran Renaissance
Technologies, ranked fourth with $2.2 billion while Kenneth
Griffin, who laid the groundwork for Citadel in his Harvard dorm
room, came in fifth with $950 million in earnings.
The magazine's so-called Rich List's Second Team, men who failed
to rank in the top 25, included a handful of managers who pursue
activist investment strategies where they push for change at
corporations. Investors have been more interested in putting
money into activist funds after their returns have topped the
average hedge funds' gains.
William Ackman, who runs Pershing Square Capital Management,
Jeffrey Ubben who runs ValueAct Capital and Barry Rosenstein,
who runs Jana Partners, are on that list.
(Editing by Cynthia Osterman)
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