geeteebee Posted April 5, 2010 Share Posted April 5, 2010 BOSTON (Reuters)—Seven of the world's top hedge fund managers earned 10-figure paychecks and one set a record for the highest-ever payout last year due to a stock market rally that pushed returns to their highest levels in a decade. Together, the industry's 25 best-paid managers collected a record $25.33 billion, more than double the amount they took home in 2008 when the financial crisis left many prominent funds nursing heavy losses. In 2007, the top 25 set a record by taking home $22.3 billion. The annual ranking, featuring the heads of the some of the industry's oldest and biggest hedge funds, was released by Institutional Investor's AR: Absolute Return + Alpha on Thursday [April 1]. Analysts had expected the overall increase after the average hedge fund gained 20% and investors began putting new money into the loosely regulated $1.5 trillion industry in 2009. Hedge fund managers typically earn management fees plus performance fees that can be has high as 50%, helping cement conventional wisdom that it can be extremely lucrative to run a hedge fund. Some funds delivered dramatically better returns than the average which helped their managers take home billions, again. David Tepper's Appaloosa Management gained more than 130% on his bet that certain bank shares would recover. Mr. Tepper earned a $4 billion payout that toppled John Paulson as the industry's record payout holder. Mr. Paulson's bet that housing prices would fall earned him $3.7 billion in 2007. Mr. Paulson, however, still made the list of top earners, ranking in fourth position with a $2.3 billion paycheck. He followed philanthropist George Soros whose $3.3 billion put him into the No. 2 spot and James Simons who earned $2.5 billion to rank as No. 3. Mr. Simons, a former mathematics professor announced his retirement from Renaissance Technologies last year. SAC Capital Advisors' Steven Cohen ranked as the fifth- highest earner with $1.4 billion. He was followed by Icahn Capital's Carl Icahn, ESL Investment's Edward Lampert, Citadel Investment Group's Kenneth Griffin, Centaurus Advisors' John Arnold and Harbinger Capital Partners' Philip Falcone. By Svea Herbst-Bayliss Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted April 5, 2010 Share Posted April 5, 2010 I wonder if they paid the top rate of tax on that? If so, it's all good. People investing know what the managers fees and cut are, no-one is forced to invest with them. Quote Link to comment Share on other sites More sharing options...
wiegie Posted April 5, 2010 Share Posted April 5, 2010 I wonder if they paid the top rate of tax on that? If so, it's all good. People investing know what the managers fees and cut are, no-one is forced to invest with them. There is no way that these guys weren't smart enough to structure their compensation so that they only pay the 15% long-term capital gains rate. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted April 5, 2010 Share Posted April 5, 2010 (edited) There is no way that these guys weren't smart enough to structure their compensation so that they only pay the 15% long-term capital gains rate. In which case I'd have them shot, then we can claim the Estate Tax at a higher rate. Edited April 5, 2010 by Ursa Majoris Quote Link to comment Share on other sites More sharing options...
muck Posted April 5, 2010 Share Posted April 5, 2010 Most onshore partnerships require the GPs to receive a prorata portion of whatever gains were in the fund. So, if all the "gains" were really interest income and short term trading gains, then those are the types of income the GPs would report. If the gains were long term gains, then that's the type of income the GP would report. Offshore partnership are the same I believe, but am not 100% sure. Quote Link to comment Share on other sites More sharing options...
SEC=UGA Posted April 5, 2010 Share Posted April 5, 2010 In which case I'd have them shot, then we can claim the Estate Tax at a higher rate. Can't shoot 'em... It's against the law, unlike the wages that they earned. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted April 5, 2010 Share Posted April 5, 2010 How come these jobs are never listed on career builder? Quote Link to comment Share on other sites More sharing options...
muck Posted April 5, 2010 Share Posted April 5, 2010 How come these jobs are never listed on career builder? While a few guys earn insane amounts of money, lots of other entrepreneurs/managers lose everything (or nearly everything) in an effort to try to build a hedge fund management business. If they don't get investors to show up fast enough ... and ... if performance in the early months/years isn't stellar, they don't have a chance to really grow their businesses. You may read about these types of guys in the headlines, but for every one of them there are dozens (hundreds? thousands?) elsewhere who are working insane hours for less than many of you on this board are making in a hope that they too can make some crazy wage some day down the road. Investment management is the most competitive business in the world and nothing is close. Quote Link to comment Share on other sites More sharing options...
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