You don't even need to beat the market to make a billion

Forbes on 2016 hedge fund performance

The average hedge fund returned 5.6% last year compared to 12% for the S&P 500 but that doesn’t mean the managers of the SPY ETF earned the most.
Forbes put together a list of the hedge fund managers who earned the most in 2016 and the results probably won’t surprise you. The familiar names are there and the paychecks are out-of-sight.

  1. James Simons – Renaissance Technologies $1.5 billion
  2. Michael Platt – BlueCrest $1.5 billion
  3. Ray Dalio – Bridgewater $1.4 billion
  4. David Tepper – Appaloosa $750 million
  5. Ken Griffith – Citadel $500 million
  6. Dan Loeb – Third Point $400 million
  7. Paul Singer – Elliott $400 million
  8. David Shaw – DE Shaw $400 million
  9. John Overdeck – Two Sigman $375 million
  10. David Sieger – Two Sigman $375 million
  11. Michael Hintze CQS $325 million
  12. San Druckenmillier – Duquesne $300 million
  13. Brett Ichan – Ichan Capital $280 million

Platt has a series of poor years then turned BlueCrest into a family office and earned 50% last year.
The irritating ones are Tepper, Griffith and Loeb, who all underperformed the S&P 500. Tepper returned 20% of AUM to clients at the end of the year and he’s returned $2B to clients for 6 straight years.
Bloomberg also pegs Ray Dalio’s wealth at $14.1B but that strikes me as low. He’s made a lot of money for a lot of years. That’s gotta compound.
The final big story is quants, who are slowly taking over, led by guys like Simons (shown above) and David Shaw.

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