Coronavirus makes hedge fund rich list outdated
Hedge fund managers made a killing in 2019, only to get put through the wringer when the coronavirus hit.
Institutional Investor revealed its closely watched “rich list” of hedge fund titans this week based on 2019 returns. Topping the list were many of the usual suspects, including mathematician-turned-quant trader Jim Simons, who earned an estimated $1.8 billion as the Dow Jones industrial average soared 22 percent.
But that was before coronavirus turned the world — and the stock market — upside down. Now, industry insiders say, some hedgies are struggling to keep money from flowing out the door.
“At least half of these guys have had their faces ripped off by coronavirus,” said one macro trader, using the industry parlance for taking huge and sudden losses. “I can see six that won’t even be on this list. And I’m looking forward to six guys you’ve never heard take their place.”
Even Institutional Investor, whose Alpha magazine released the list weeks earlier than it usually does, noted that its 2019 “rich list” already feels outdated.
“Of course, given the current cataclysm in global markets,” they wrote, “much of this wealth will likely have been destroyed in the three months since 2019 ended.”
According to the list, the top 25 hedge fund titans made a collective $20.2 billion in 2019 — the most since 2013. The top eight made more than $1 billion apiece, compared to just three who met that bar in 2018.
And while Simons, head of super secretive hedge fund Renaissance Technologies, topped the list yet again, he had to share the No. 1 spot with a new face: London-based trader Chris Hohn.
Hohn, perhaps best known for being a party to the biggest divorce settlement in UK history, also raked in $1.8 billion last year, earning him a spot in the top 10 for the first time ever on returns of more than 40 percent for his TCI fund.
Citadel’s Ken Griffin and Millennium Management’s Izzy Englander shared the No. 3 spot, pocketing $1.5 billion. They were closely followed by Tiger Global’s Chase Coleman, who banked $1.4 billion.
Point72’s Steve Cohen pocketed $1.3 billion — literally half of what he was going to pay to own the New York Mets before the deal came crashing down. Cohen, who returned 14.9 percent to investors, was tied with Appaloosa Management’s David Tepper, who’s fund gained 143 percent last year.
Coming in at No. 8 is Bridgewater’s Ray Dalio — a precipitous fall for from his No. 1 slot in 2018.
It’s difficult for asset managers to generate big profits when nearly every asset class is plummeting in value at once, experts said. “If you know someone who’s making a killing right now, give me their number,” one fund manager joked to The Post. “I’d like to call them and invest.”
Source: Read Full Article