Pure luck and get paid $1.4 billion?

James Simons, at $1.6 billion, was the nation’s best-paid hedge fund manager last year, according to Institutional Investor’s Alpha magazine. Credit Fred R. Conrad/The New York Times

James Simons, at $1.6 billion, was the nation’s best-paid hedge fund manager last year, according to Institutional Investor’s Alpha magazine. Credit Fred R. Conrad/The New York Times

No evidence that top hedge fund managers know what they’re doing

Half the most highly paid last year did worse than the market.

One of the most egregious aspects of unrestrained capitalism is the obscene amount of money skimmed by the top club compared with the struggles of those they live off.

Come back Karl Marx all is forgiven!

“Things became so tough last year that big money managers found themselves sitting at the negotiating table with their investors, offering lower fees and better terms for sharing in the returns.

“It’s a moment in time where you’re going to see a cleansing of the hedge fund industry,” said Adam I. Taback, head of global alternative investments at Wells Fargo Investment Institute.”

NYTimes DealBook:

Hedge Fund Managers Don’t Always Beat the Market, but They Still Make Billions
The 25 best-paid managers earned a collective $11 billion in 2016. But some big names, like William A. Ackman and John A. Paulson, did not make the cut.

By ALEXANDRA STEVENSON MAY 16, 2017

Good performance, mediocre results or even downright ugly returns. When it comes to hedge funds, it scarcely matters. Even as some investors begin to sour on these high-priced stock pickers, the top fund managers still haul in enormous paychecks.

The 25 best-paid hedge fund managers earned a collective $11 billion in 2016, according to an annual ranking published on Tuesday by Institutional Investor’s Alpha magazine.

Even managers who had a tough year were able to cash in. Nearly half of the top-25 earners made single-digit returns for their investors, a lackluster sum in a year when the Standard & Poor’s 500-stock index was up 12 percent, accounting for reinvested dividends.

The top earner of 2016 was James Simons, the former code breaker for the National Security Agency and the founder of Renaissance Technologies, who made $1.6 billion. Ray Dalio, the founder of Bridgewater Associates who is best known for his philosophy of “radical transparency,” came in a close second with $1.4 billion. Further down the list was Robert Mercer, the co-chief executive of Renaissance and one of the biggest backers of Donald J. Trump’s presidential campaign, who earned $125 million.

But some of the best-known names in the industry — including William A. Ackman, John A. Paulson and Edward S. Lampert — failed to make the list. Also missing from the list: women.

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As usual at the Times, no comments space offered on a fertile topic!

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