James Simons Banked $2.5 Billion Dollars in 2008
Many people are struggling in this current economic environment, and many hedge funds have been forced to shutter their doors over the past 12 months.
However, times are still good for a number of high-profile hedge fund managers.
In fact, according to a recent article in Alpha Magazine, the top 25 highest-earning hedge fund managers in 2008 managed to take home an average of $464 million dollars. Each.
The top 4 managers all made at least a billion dollars in 2008 (after collecting performance and management fees, as well as watching their capital positions in the hedge funds grow).
The list was topped by the ultra-successful James Simons (Renaissance Technologies Corp.), who raked in an estimated $2.5 billion dollars in 2008.
Simons continues his red-hot run over the past 4-5 years - independent sources estimate that the mathematician and trader earned $1.5 billion dollars in 2005, $1.7 billion dollars in 2006 and $2.8 billion dollars in 2007.
John Paulson (of Paulson & Co.) had another strong year in 2008 as well, raking in an estimated $2 billion dollars for himself.
Paulson thrust himself into the limelight after correctly predicting the collapse of the subprime mortgage market in the United States in 2007. Paulson made himself (and his investors) billions of dollars, and continued to rake in the money in 2008. Those who figured that Paulson would be a flash in the pan were in for a rude awakening after he made multiple blockbuster trades for his companies in 2008.
The top 5 list was rounded out by: John Arnold (+1.5 billion dollars), Georges Soros (+1.1 billion dollars) and Raymond Dalio (+780 million dollars).
Other notable names that appeared in the top 25 included:
Stanley Druckenmiller (+260 million dollars), Alan Howard (+250 million dollars), James Chanos (+225 million dollars) and Roy Niederhoffer (+200 million dollars).
As Alpha points out - there were some very well-known names that took an absolute beating in 2008 as well.
The top 8 biggest losers suffered a combined loss of $6.2 billion dollars.
Kenneth Griffin (of Citadel Investment Group) led the pack, as he suffered a loss of $2 billion dollars in 2008.
Edward Lampert (of ESL Partners) suffered greatly as well, dropping an estimated $1.1 billion dollars in 2008.
Steven Cohen (-750 million), T. Boone Pickens Jr. (-450 million) and Carl Icahn (-400 million) all lost significant sums of money in 2008 as well.
Edward Lampert and Carl Icahn both have portfolios that are not very well diversified. Lampert took a bath on his Sears position, while Icahn suffered from weak performances in Motorola and Yahoo!
Despite a very off year for the hedge fund industry in general, the top 25 hedge fund managers managed to rake in a combined $11.6 billion dollars.
It will be interesting to see if names such as Simons and Paulson can continue to rake in billions of dollars in profits over the next couple of years. Both are extremely smart and very savvy, so I certainly wouldn't put it past them.
Filed under: Hedge Fund News