Institutional investor’s alpha has the list of top ranking fund managers by income last year, and this is an often mentioned list, at least by those in the investing world. The top 10 have, in all, raked in over $15 billion in 2013.
The list is headed by David Tepper of Appaloosa Mgmt, with $3.5 billion in earnings. He’s topped three times in five years now, and made 42% this year. The money made is both from fees (typically, 2% management fees and 20% of profits in a 2/20 model) and also from gains within the portfolio of the fund manager’s own money invested.
John Paulson figures here, with returns of 62% in one of his funds (housing recovery) and from great telecom picks.
Simons and Griffin run technology driven funds, and some others like Robbins and Loeb have been involved in activist investing to get better returns. Simons has figured in every of the last 13 top lists.
Steve Cohen, the second on the list, will not figure again. As part of a settlement in insider trading investigations, Cohen moved to only managing his own money.
Ray Dalio seems to have made a lot of money from fees, through much higher assets, though his returns were low single digit very unimpressive numbers. From NYTimes:
Raymond Dalio, the 64-year-old founder of the world’s biggest hedge fund, Bridgewater Associates, earned $600 million. His funds gave investors returns of 3.5 percent to 5.3 percent. Mr. Dalio, whose views on the economy are closely watched, is also known for his 123-page Bridgewater manifesto called “Principles,” which espouses a Darwinian capitalism reminiscent of the works of Ayn Rand.
Paul Tudor Jones is a brilliant person to learn from, and he does every sort of investing technique known, from macro to technicals to reading the tape. You should read his 13 insights, and one statement he made that I really like:
I see the younger generation hampered by the need to understand and rationalize why something should go up or down. Usually, by the time that becomes self-evident, the move is already over. When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart. Why work when Mr. Market can do it for you? These days, there are many more deep intellectuals in the business, and that, coupled with the explosion of information on the Internet, creates the illusion that there is an explanation for everything and that the primary task is simply to find that explanation. As a result, technical analysis is at the bottom of the study list for many of the younger generation, particularly since the skill often requires them to close their eyes and trust the price action. The pain of gain is just too overwhelming for all of us to bear!