There are 45 billionaires in the world who have made their fortunes managing hedge funds. Most of the world’s hedge fund billionaires got richer last year, even though the vast majority of these money men did not perform particularly well in 2014. The average hedge fund returned 3.3% last year, according to HFR, even as the Standard and Poor’s 500 index returned 13.7%. The majority of the world’s hedge fund billionaires were also unable to keep up with the stock market’s rise in 2014. Some even lost money.
George Soros remains the world’s richest hedge fund manager with an estimated net worth of $24.2 billion. His family office, Soros Fund Management, returned about 8% in 2014. A major philanthropist who has contributed billions of dollars to various causes, Soros, 84, returned all the external money he managed to outside investors in 2011. Soros Fund Management, however, is still run like a big hedge fund. Its day-to-day operations are handled by Scott Bessent, the chief investment officer, but Soros remains involved in the decision making.
Ray Dalio, 65, has built a money-making machine out of his Bridgewater Associates, the world’s biggest hedge fund firm with some $160 billion under management. He now has an estimated net worth of $15.4 billion. An important part of his empire is the All Weather fund, which makes up about $80 billion of Bridgewater's assets. It returned 8.6% net of fees in 2014, an important turnaround after the fund stumbled in 2013. Bridgewater's big Pure Alpha macro hedge fund returned 3.6% net of fees in 2014, a year in which many macro funds struggled. Bridgewater's Pure Alpha Major Markets fund, another Bridgewater hedge fund launched in 2010, returned 8.7% in 2014.
James Simons, 76, continues to play a role at his Renaissance Technologies, the $26 billion quantitative trading hedge fund he retired from in 2010. His net worth is now estimated to be $14 billion.
Steve Cohen’s SAC Capital hedge fund firm pleaded guilty to insider-trading related charges in November 2013 and paid $1.8 billion to the federal government in penalties and fines. Cohen returned his outside investors’ money and now manages his own fortune in a family office called Point72 Asset Management. Cohen and his firm have continued to perform very well. His net worth is now estimated to be $11.4 billion, higher than it has ever been before.
Just when it looked like John Paulson had turned things around, his comeback was derailed in 2014. Paulson became one of the richest hedge fund managers by betting against subprime mortgage securities leading up to the financial crisis. He had a great 2013 after floundering in 2011 and 2012. But in 2014 he again saw his key funds lose money. His Paulson Advantage Plus fund lost 24.2% and his Special Situations fund fell by 19.3%. As a result, he took a $2.3 billion hit in 2014. His net worth is now estimated to be $11.2 billion.
David Tepper cooled off last year after having posted one of the greatest five-year performance stretches the hedge fund industry has ever seen. Tepper’s big Palomino fund returned 2.2% net of fees in 2014. He is trying to ignite another hot streak by publicly pushing General Motors to conduct an $8 billion share repurchase. He is now worth an estimated $10.4 billion.
Ken Griffin’s hedge fund business, Chicago-based Citadel LLC, continues to perform very well. The firm’s main hedge funds returned nearly 18% net of fees in 2014. The firm now manages some $24 billion in assets. He is embroiled in a contentious divorce proceeding with his wife of 11 years, Anne Dias Griffin, a Goldman Sachs alum who also is a money manager. If he loses the case, his net worth would take a hit. But for his net worth is estimated to be $6.5 billion.
Activist hedge fund managers Chris Hohn’s divorce to Jamie Cooper-Hohn knocked him out of the Forbes list of the world’s billionaires. The couple started the Children's Investment Fund Foundation in 2003. Hohn filed for divorce and split the charity from his Children’s Investment Fund hedge fund. In 2014, a London court awarded Jamie Cooper-Hohn about $530 million of the marital estate. Hohn's activist European hedge fund, the Children's Investment Fund, returned 8.3% in 2014 net of fees.
Bill Ackman, founder of hedge fund firm Pershing Square Capital Management, sizzled in 2014 and had the biggest move up the list of hedge fund billionaires. His net worth is now estimated to be $2.5 billion. His main hedge fund returned 37.2% net of fees in 2014. It was Ackman's best performance in years and came at an important time. Fueling the good results was Ackman's big position in Allergan, a creative if contentious trade that ended well for Ackman when Actavis agreed to buy the Botox-maker. Ackman also raised nearly $3 billion in permanent capital and now manages some $18 billion.
