David Tepper On Top in 2009

According to the New York Times (link below), David Tepper of Appaloosa Management earned an estimated $4 billion in 2009, topping the list of the most successful hedge fund managers of last year.

The list of the top ten biggest earning hedge fund managers of 2009 was dominated by some very recognizable names as the industry came roaring back. George Soros, James Simons, John Paulson and Steven Cohen all had personal earnings of at least $1 billion last year.

David Tepper may be the only name on the list that is not immediately recognizable to most people.

Tepper, according to the Wall Street Journal, earned his fortune by betting that "America would avoid a repeat of the Great Depression". The fund manager scooped up many beaten-down names at the height of the market downturn (February, March) and made billions as these stocks came roaring back in the second half of the year.

Whenever I hear about hedge fund managers making boatloads of money, the first thing that I do is crack open their 13F-HR's in order to see which long positions the company was holding at the end of the last quarter (Q4 2009).

As of the end of 2009, Appaloosa Management LP's top five positions were:

Bank of America (Common Shares + UNIT 99/99/9999)
Wells Fargo (Common Shares + PERP PFD CNV A)
Citigroup (Common Shares)
Fifth Third Bancorp (Common Shares)
AIG (UNIT 99/99/9999)

Tepper's big bet on a recovery in the financial sector paid off handsomely.

Many top hedge fund managers have been aggressively purchasing the likes of Bank of America and Citigroup, betting that these stocks will continue to recover throughout the rest of the 2010.

For instance, Appaloosa Management LP owned about 80 million shares of Citigroup at the end of the third quarter. By the time that their latest 13F-HR was filed, the firm owned nearly double that amount.

Fortune favors the bold, and David Tepper reaped the benefits of buying when everyone else was selling.

Source: New York Times - Big Earners: Hedge-Fund Leaders for 2009


Filed under: Hedge Fund News