With U.S. stocks and bonds rising ever higher, 2014 was a pretty good year on Wall Street. But for many big financial players it was not as great a year as you might expect. The good: After being in the doldrums for years, the mergers and acquisitions business finally broke through in a huge way, flooding Wall Street with rich fees and paydays. It could end up being the biggest acquisition boom year ever. The bad: investment banks kept suffering declines in their key trading businesses and most hedge funds continued to trail far behind the broader U.S. stock market—with some prominent money managers getting hurt badly by specific market moves, like the slump in oil prices. Still, with the Standard & Poor’s 500 index hitting new highs going into the end of the year, there were some winners on Wall Street in 2014. Here are the 10 biggest:
1. William Ackman. For this billionaire hedge fund manager, everything went right in 2014. His Pershing Square hedge fund has generated net returns in the 35% range, fueled by a big and bold bet on
2. Kenneth Moelis. Arguably the biggest winners of the 2014 M&A boom have been the smaller investment banks and nobody has benefited more than Moelis. The former UBS dealmaker took Moelis & Co., the deal advisory firm he founded in 2007, public in April. The stock is up 25% since the IPO. Moelis cashed-in by selling $53 million of stock in November. He still owns more shares worth some $390 million.
3. Jeffrey Gundlach. With Bill Gross’ demise at PIMCO, Gundlach effectively became the new bond king in 2014. His DoubleLine Capital has accumulated some $60 billion in assets in less than five years and Gundlach’s great investment record goes back much further. He is also now a billionaire. It has been an incredible comeback for Gundlach, who was fired in 2009 by TCW and endured a bruising legal battle with his former employer. You can read more about it in this recent Forbes Magazine story.
4. Brian Moynihan. After years of digging his bank out of the Countrywide fiasco and mortgage mess, the Bank of America CEO got a big promotion, adding the title of chairman. He jumped over the last big legal hurdle in August with a $16.65 billion mortgage settlement with various governments that puts the financial crisis behind him. The bank’s stock, which changed hands for just over $5 in 2011, now trades for more than $16.
5. Brad Katsuyama. The co-founder and CEO of IEX Group’s effort to build a business by providing a solution to perceived high-frequency trading flaws got a big boost after he was cast as a hero in Michael Lewis’ bestselling book Flash Boys. IEX raised $75 million in September and the trading venue is getting closer to being registered as a stock exchange.
6. Former politicians & government officials. The finance business was once again the place for high-profile government officials and politicians to land. Tim Geithner, Treasury Secretary for much of Barack Obama’s presidency and a lifelong government employee, in March started a lucrative job as president of Warburg Pincus, a major New York private equity firm. After losing his primary election, former U.S. House Majority Leader Eric Cantor took an investment banking job at Moelis & Co. that will pay him $3.4 million.
7. Paul Taubman. Another beneficiary of the 2014 mergers boom. Two years ago he left Morgan Stanley amid a power struggle. For a while this investment banker was scoring big acquisition advisory work all by himself. By the summer of 2014 he hired a few people and launched his own firm. In October Taubman announced he was combining his business with Blackstone’s advisory firm, which would be spun out of the private equity behemoth. Taubman will run the newly formed business.
8. Philip Hammarskjold. The chief executive of Hellman & Friedman doesn’t get a lot of headlines, but his private equity firm is one of the most respected in the buyout business. In November, Hellman & Friedman raised $10.9 billion for its largest ever private equity fund. It was a lightening quick fundraising process and the firm could have raised many billions of dollars more.
9. Greg Fleming. The head of Morgan Stanley’s wealth and investment management business saw his star continue to rise in 2014. He is already responsible for more than half of Morgan Stanley’s revenue and is now being seen as the top candidate to succeed CEO James Gorman if another company doesn’t poach him first.
10. Commodity Trading Advisors. These are the financial players that benefited from the plunge in oil prices in 2014. Hedge funds that use computers to profit from market trends, also known as managed futures funds, seemed to be in trouble as recently as the first half of 2014. Some were closing after several straight disappointing years. But CTAs posted their best month in over a decade in November, up 8.2% on average, further fueling a good year the group really needed. Emmanuel Roman benefitted and shares of the publicly-traded hedge fund firm he runs, Man Group, soared by 66%. Others like billionaire David Harding’s Winton Capital Management and Ewan Kirk’s Cantab Capital Partners posted solid performance figures in 2014.
