When the history of hedge funds is written, 2012 will not be seen as a banner year. After the brutal last year came to a close, the number of hedge funds, traders and broker-dealers still standing were far fewer than in previous years thanks to market volatility, a tightening market and general caution or post-crisis risk malaise. That said, there were some bright spots.
Forbes released its list of the world's richest hedge fund managers and traders earlier this week. The editors proclaim that "The world's billionaire club now includes 40 men who have earned a significant part of their wealth from managing hedge funds."
The list has some usual suspects and some surprising names when you consider that hedge fund managers share a fondness for secrecy and avoiding media spotlight in the same way that Lindsay Lohan avoids court dates and her 12 Step meetings.
[Hedge funds run by women continue to profit.]
Of the Top 40, here are the top 10 Fund Managers and Traders and their estimated net worth:
1. Carl Icahn, $20 billion.
Icahn has been in the news for battling fellow hedge fundie Bill Ackman - Number 34 with an adorable $1.2 billion in net worth - over nutritional supplement seller Herbalife.
2. George Soros, $19 billion.
As head of Soros Fund Management, George is the liberals’ favorite rich guy.
3. Ray Dalio, $12.5 billion
While the world was disco dancing , Ray founded the world's biggest hedge fund, Bridgewater Associates, in his Manhattan apartment in 1975.
4. James Simons, Net worth: $11.7 billion
It's good to be "The Quant King" where he ruled over Renaissance Technologies until 2010.
5. John Paulson, $11.2 billion
Not bad for a guy whose fund dropped more than 14 percent last year.
6. Steven A. Cohen, Net worth $9.3 billion
Go Google his firm "SAC + Insider trading". Not pretty.
7. David Tepper, $7 billion
Sure he owns a part of the Pittsburgh Steelers but he gives to food banks and colleges thanks to hs $15 billion hedge fund, Appaloosa Management. His secret? Average annualized returns of approximately 30 percent net since it was founded in 1993.
8. Bruce Kovner, $4.3 billion
9. Kenneth Griffin, $4.1 billion
The keeper who founded hedge fund behemoth Citadel.
10. Paul Tudor Jones II, $3.6 billion
Some impressions: This is a very diverse group of people in the Forbes list: If by diverse you mean white males between the ages of 40 and 80. There are no people of color (to be fair, at least three hedge fundies were camera shy) or women hedge fund managers or traders to be found on the list. Also, the Internet has cracked open many of their practices, lifestyle habits and coming and goings. We know about recent hedge fund squabbles over Herbalife and Apple and who is seeing their future in jeopardy thanks to allegedly illegal practices.
While we can fantasize about all of the fun things we would do with their money, would we really want the pressure and the subsequent fear and terror that goes with their jobs?
[Are outsized returns for hedge funds a thing of the past? Read the State of the Hedge Fund Industry 2013.]