Stocks may have plunged into a bear market in 2022 — but that didn’t stop hedge fund managers from bringing home billions of dollars in personal earnings.
Although the market rout caused a large portion of long-short and long-only managers to lose money last year — with many performing even worse than the S&P 500 index’s 19 percent decline — 2022 was a very good year for multistrategy, macro, trend-following, and fixed-income managers.
Many of them enjoyed their best years in recent memory.
It’s these managers who dominate Institutional Investor’s 22nd annual Rich List — the definitive ranking of the 25 highest-earning hedge fund managers, based on a combination of fee earnings and gains on their own capital.
Altogether, the top 25 made $21.5 billion in 2022, making last year’s total the third highest, after 2020 and 2021. This works out to an average of about $860 million each.
The median manager earned $570 million — the fourth best in 22 years — and the seven highest earners all made at least $1 billion.
The top earner was Ken Griffin, founder of multistrategy giant Citadel. He personally made $4.1 billion — the most any hedge fund manager has ever earned in the history of the Rich List.
Citadel’s flagship fund, Wellington, posted a better than 38 percent gain last year, making Griffin one of the top performers in his strategy. Firmwide assets under management swelled to $53.7 billion.
Griffin was followed by multistrat rival Izzy Englander of Millennium Management, who made $3.2 billion. Altogether, Englander has earned more than $10 billion over the past three years.
But though some famous managers had banner years, many stock pickers got crushed in the bear market — and only three long-short managers did well enough to make it onto the Rich List: Greenlight Capital’s David Einhorn and Marshall Wace’s Paul Marshall and Ian Wace.
Those notably missing from the list include Tiger Cubs and related felines, such as Tiger Global Management’s Chase Coleman and Scott Shleifer and Coatue Management’s Philippe Laffont. Other Rich List regulars also fell short in 2022, including TCI Fund Management’s Chris Hohn and Third Point’s Dan Loeb.
It was undeniably a challenging year, with so many managers losing money that there weren’t enough to field a Second Team.
So who did make the cut? Read on to find out — and click here for the full list of the top 25.
The multistrategy maven tops the Rich List for the first time in six years after Citadel’s flagship Wellington fund posted its best results in 13 years, surging 38.1 percent. It was up nearly 117 percent over the past three years. Each of its five core strategies — fixed-income and macro, commodities, equities, quant, and credit — made money last year. But it wasn’t the only fund that did well: The firm’s Global Fixed Income fund jumped 32.6 percent; Tactical Trading gained 26.5 percent; and Citadel Equities, a market-neutral fund, rose 26.4 percent. In 2022, Griffin made $16 billion altogether for investors, according to LCH Investments, and at the end of the year, the firm returned about $7 billion to investors. Griffin is among a growing number of hedge fund managers to move to Florida in recent years, and he has pledged support for the state’s governor, Ron DeSantis, if he runs for president. As a sort of parting gift to his former hometown, Griffin donated more than $130 million to 40 Chicago organizations in June, including gifts of $30 million to the University of Chicago, $25 million to Northwestern Medicine, and $20 million to the Field Museum.
Israel (Izzy) Englander
Griffin’s archrival takes the No. 2 spot for the second straight year after Englander’s funds gained 12.4 percent in 2022. The 53-year Wall Street veteran’s firm now manages $58.6 billion and boasts more than 290 investment teams across four primary strategies: relative-value fundamental equity, equity arbitrage, fixed-income, and quantitative. Late last year, the Financial Times reported that co–chief investment officer Bobby Jain had left the firm. In his place, Millennium created an “office of the chief investment officer,” which includes two new co-CIOs — Paul Russo, who had been serving as the firm’s global head of equities risk, and Justin Gmelich, formerly a partner and global head of markets at King Street Capital Management — as well as heads of risk management for the asset classes in which the firm trades.
Point72 Asset Management
New York Mets fans were ecstatic last fall when Cohen, the team’s owner, shelled out $800 million for nine free agents. This sum proved to be less than half of what he earned thanks to his multistrategy fund’s 10.25 percent gain. Altogether, Point72 made $2.4 billion in profits for investors, according to LCH. Point72’s largest strategy by both assets and head count is the discretionary long-short strategy. Others include Cubist Systematic Strategies, which engages in computerized trading in many liquid markets; a global macro business that makes discretionary investments; and a private investing business that invests in venture capital.
Tepper’s Appaloosa posted roughly an 8.25 percent return last year — and the eclectic investor personally accounts for the bulk of the assets in his now West Palm Beach, Florida–based hedge fund. The Carolina Panthers owner has been bearish for some time, telling CNBC in late December that he was “leaning short” on stocks, believing they were still overvalued. At year-end, two stocks accounted for more than 28 percent of Appaloosa’s more than $1.3 billion U.S. stock portfolio: power and energy supplier Constellation Energy and Google parent Alphabet.
Simons brought home his lowest earnings in a decade after RenTech’s three computer-driven funds that are available to outsiders — RIDA, RIEF, and RIDGE — all posted low- to mid-single-digit returns in 2022. But the former No. 1 earner remains the only hedge fund manager to qualify for the Rich List in every year since its debut. His flagship Medallion Fund, which has been closed to outsiders for 30 years, has compounded at about 37 percent per year net of its 5 percent management fee and 44 percent performance fee, making Simons the greatest hedge fund manager of all time. In 2021, the mathematician and onetime government code breaker stepped down as chairman of the board of the firm he founded in 1982.
Two Sigma Investments
Quant giant Two Sigma enjoyed another strong year as its largest diversified funds posted gains of 8 to 10 percent. The firm, which manages $60 billion, employs more than 1,500 people, including more than 200 PhDs and 14 International Mathematical Olympiad medalists. Two Sigma blends data and technology in its quest to generate alpha, drawing on more than 10,000 data sources and potentially trading as many as 8,000 exchange-listed equities, among other assets. The firm, launched in 2001, has also made more than 75 venture investments. In 2019, Overdeck, a onetime math prodigy, and Siegel, an artificial intelligence expert, accepted lifetime achievement awards at Institutional Investor’s Hedge Fund Industry Awards.
Late last year, Dalio ceded control of the hedge fund giant he founded in 1975. But he still has a big chunk of his net worth invested in the macro specialist, which ranks as the world’s largest hedge fund, with about $125 billion in assets. The New York Times recently reported that Dalio had agreed to relinquish control in exchange for a lucrative exit package that will pay him billions of dollars over the next several years. As for the firm’s investment strategy: Bridgewater entered 2022 expecting that inflation would be stickier and that the Federal Reserve would tighten more than the markets expected. Then, at about midyear, it positioned itself on the expectation that the markets would price in the adverse impact of tightening on the economy and corporate profits. The firm’s flagship fund, Pure Alpha 18 Percent (also known as PA II), ended the year up 9.46 percent, whereas All Weather 12 Percent, the main beta fund, lost more than 26 percent.
D.E. Shaw Group
Shaw hasn’t run the macro giant he founded in 1988 as a quant firm for some time, but it is clearly doing just fine nevertheless. The Composite Fund — the firm’s largest multistrategy fund — gained 24.7 percent last year. Oculus, a macro-oriented multistrategy fund, was up 20 percent. Gains were generated from systematic, discretionary, and hybrid strategies. The firm, which now manages $60 billion, recently raised its performance fees for the second time since 2019. Oculus, which charges a 2.5 percent management fee, boosted its performance fee from 25 percent to 30 percent, and Composite went from 3 and 30 to 3 and 35 percent. At year-end, D.E. Shaw returned a substantial portion of its 2022 profits to outside investors in Composite and Oculus. Last year, it made an estimated $8.2 billion in net profits for investors, according to LCH.
Haidar Capital Management
Haidar makes his debut in the top 25 after toiling in virtual obscurity for most of the 23 years he has been running Haidar Jupiter Fund. This is what happens when you generate a 193 percent net return in a single year — as he did in 2022. The macro specialist qualified for the Second Team last year after posting his then best-ever return of nearly 70 percent in 2021. Haidar’s eponymous firm trades a wide range of assets, including equities, currencies, and fixed-income. The firm also uses a “substantial” amount of leverage, according to its own filings with regulators. Haidar’s performance last year was primarily driven by two strategies: Fixed-income kicked in 203 percent to gross gains, and commodities accounted for 64 percent. Until the past year or so, the firm usually managed less than $1 billion. It topped out at $5 billion at the end of last September before finishing the year with a little more than $3 billion under management.