Making $400,000 Per Hour, The Best Paid Hedge Fund Manager In 2013 Was...

Tyler Durden's picture


When it comes to returns, 2013 will be best remembered as the fifth consecutive year in which the S&P 500, lead by Chief Risk Officer and Portfolio Manager Ben Bernanke (replaced by Janet Yellen in 2014 following a bumper 30%+ year), outperformed over 90% of all hedge funds, which as the recent beta blow up has shown, have virtually no original "alpha" ideas, and all merely piggyback on the same high beta "greater fool", hedge fund hotel trades and/or lever on beta as much as their Prime Broker will allow them (in many cases quite a lot).

And yet, hedge fund investors were perfectly happy to keep handing over 20% of their upside and paying a 2% management fee when they could have generated the same returns for free by simply buying the SPY ETF.

How happy?

According to a just released ranking by Institutional Investor magazine, The 25 top earners of 2013 raked in a total of $21.15 billion. That’s roughly 50 percent more than the 25 best-paid managers reaped in each of the previous two years. Four managers earned more than $1 billion, while a fifth just missed that distinction. To qualify for the list, a manager needed to have earned at least $300 million in 2013, or 50 percent more than the 2013 cutoff.

And despite the epic payday, these hedge fund executives may have handily beaten their take-home total for the previous year, but 2013 was hardly the most profitable year for the highest-earning managers as a group. The total earnings for the top 25 are only the fourth highest in 13 years, while their average combined earnings of $846 million are just the fifth-best showing.

Then again, when it comes to the Top 10 hedge fund managers, who all make more money in one year than they can spend in their lifetime, it is no longer about the money, but about bragging rights as the only thing bigger than the 20% performance fee is the PM's ego.

So in the annual ranking of the best paid hedge fund managers, in the top spot, paid a whopping $400,000 per hour amounting to a mindblowing $3.5 billion in 2013, is... well, here is the full list.

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Tue, 05/06/2014 - 12:06 | 4732130 CH1
CH1's picture

And the suckers keep buying.

Tue, 05/06/2014 - 12:16 | 4732154 A L I E N
A L I E N's picture

Their funds performance versus the S&P should be on the chart as well.

edit:  Tepper had ~42% return in his two main funds

Well I guess someone knows how to play the game lol

Tue, 05/06/2014 - 12:29 | 4732229 LawsofPhysics
LawsofPhysics's picture

Yes, should be "Well I guess some people have a direct line to the Fed"...

All animals are created equal and all that...

Tue, 05/06/2014 - 12:32 | 4732239 NotApplicable
NotApplicable's picture

Yet we openly mocked him for his CNBS "balls to the wall" idiocy.

I guess clowns can earn a decent living too?

Tue, 05/06/2014 - 13:00 | 4732357 Anusocracy
Anusocracy's picture

Scams aren't run to benefit the huddled masses.

Tue, 05/06/2014 - 13:03 | 4732371 Stackers
Stackers's picture

So wait. SAC Capital gets shut down, the manager just squeezes by not getting criminally prosecuted and he got paid $2.4 billion ?

Color me confused

Tue, 05/06/2014 - 13:13 | 4732405 BLOTTO
BLOTTO's picture

I can't wait to see some of those hedge guys when we are all running through the forest...

Tue, 05/06/2014 - 13:58 | 4732620 Divided States ...
Divided States of America's picture

8 of the 11 on the lists are Jews...

as well, the past three Federal Reserve Chair are Jews....not to mention the FOMC.

also, 8 out of 10 guests or people they mention daily on CNBC are Jews...

What are the chances of that. Its mind boggling.

Tue, 05/06/2014 - 14:27 | 4732753 Againstthelie
Againstthelie's picture

Nothing to see here. Move on!

You don't follow the orders? Then you are an antisemite!

Tue, 05/06/2014 - 14:31 | 4732773 Divided States ...
Divided States of America's picture

Whats up ATL....btw, has Francis Sawyer gone again? I havent seen him post in a while...actually I havent been posting as much on here either.

Tue, 05/06/2014 - 12:34 | 4732245 lordylord
lordylord's picture

"And the suckers keep buying."

You said a mouthful.  We don't need government "help" to regulate anything.  Just STOP buying.  Take your money out.

Tue, 05/06/2014 - 12:44 | 4732275 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Tell that to all the ZH daytraders. Even they can't resist and they should know by now what's at stake.

Tue, 05/06/2014 - 12:58 | 4732276 SoilMyselfRotten
SoilMyselfRotten's picture

Actually there was an interesting article on KWN by Michael Pento and he refers to Tepper. Tepper postulated in 2009 that the market would rise no matter what due either to market conditions or Fed intervention. Whats more interestiing is he NOW says that markets are going to tank regardless of either of the above scenarios.

Tue, 05/06/2014 - 13:00 | 4732358 LawsofPhysics
LawsofPhysics's picture

"Whats more interestiing is he NOW says that markets are going to tank regardless of either of the above scenarios." - Yes, something about full faith and credit and all that.

Tue, 05/06/2014 - 15:30 | 4732561 dontgoforit
dontgoforit's picture

Time to taper, Tepper!

Tue, 05/06/2014 - 13:50 | 4732585 ElvisDog
ElvisDog's picture

All that money can't buy Tepper a full head of hair. Sad, really.....

Tue, 05/06/2014 - 12:28 | 4732207 Payable on Death
Payable on Death's picture

I don't (want to) have a problem with high earnings. However, the bailouts changed my mind. I used to defend these earnings by saying, "They took the risk." Turns out, taxpayers really took the risk (for GS, at least). And, now we have the Fed lifting all oligarchic boats...

Tue, 05/06/2014 - 12:33 | 4732228 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Sshh! You must forget about that and pretend America is a free market... until the next meltdown. Now get to work, you could make this much too if weren't so dumb and lazy!!!


Tue, 05/06/2014 - 12:31 | 4732234 i_call_you_my_base
i_call_you_my_base's picture

The issue I have with high pay is that if you can make $10 million in a year, who cares if your company crashes and burns. You've just made enough for life. This is also the case with fraud. If you make enough money, your reputation doesn't matter over the long-term because you just retire.

Tue, 05/06/2014 - 14:30 | 4732768 SAT 800
SAT 800's picture

Intelligent, or I should say, properaly educated, sophisticated, speculators would not have bought the SPY ETF. ETF's are a mugs game designed for and sold to the "public", by the advertising psychologists working for the brokerage industry. The sophisticated speculator would have a futures account and buy and hold the S&P contract, ES; using considerable free margin.

Tue, 05/06/2014 - 12:07 | 4732135 Pooper Popper
Pooper Popper's picture

Hang em High!

Tue, 05/06/2014 - 12:12 | 4732155 Ignatius
Ignatius's picture

Nobody "earns" this kind of money.  They may gain it, but earn it, never.

Tue, 05/06/2014 - 16:18 | 4733341 dontgoforit
dontgoforit's picture

Envy is a grevious problem - I'm grieving.  He makes more money in a day than I'll make in my lifetime - and I have really worked hard at times.

Tue, 05/06/2014 - 16:43 | 4733460 waterhorse
waterhorse's picture

So you feel envious of a rigged system and fraud?  Or were you just being facetious?

Tue, 05/06/2014 - 12:08 | 4732136 Rubbish
Rubbish's picture

How much does his gardener make? I still got this shovel.

Tue, 05/06/2014 - 12:08 | 4732137 LawsofPhysics
LawsofPhysics's picture

Just the "free and fair market" sorting out what everyone's compensation should be...


Bullish for those of us with experience providing or managing personal security teams...


Tue, 05/06/2014 - 12:09 | 4732139 Seasmoke
Seasmoke's picture

The Tribe. 

Tue, 05/06/2014 - 12:18 | 4732173 pods
pods's picture

Damn, I could not believe that. What are the odds that they would occupy the top 4 spots?


Tue, 05/06/2014 - 12:23 | 4732194 Edward1290
Edward1290's picture

had extra cheese on my pizza while watching the pope on TV

Tue, 05/06/2014 - 12:23 | 4732195 NotApplicable
NotApplicable's picture

Why, 100%, obviously.

Tue, 05/06/2014 - 12:24 | 4732201 ParkAveFlasher
ParkAveFlasher's picture

Francis Sawyer did a daily recalc of those odds, and look where it got him.  I think there is an assumptive quality by now.

Tue, 05/06/2014 - 12:27 | 4732217 Edward1290
Edward1290's picture

Francis taught us so much..........

Tue, 05/06/2014 - 16:56 | 4733524 Monty Burns
Monty Burns's picture

And that's why he was banished.

Tue, 05/06/2014 - 12:26 | 4732208 LawsofPhysics
LawsofPhysics's picture

Stay vigilent.  I never complain when making the executioners list gets a little easier.

Give these guys all the rope they want.

Tue, 05/06/2014 - 12:44 | 4732272 cougar_w
cougar_w's picture

On a day like this it is comforting to recall the time I fed Bernie Madoff to an actual tiger:

Best line: "Well Mr Madoff you might have walked in here wearing prison orange, but you'll be walking out wearing stripes! You like stripes I hope?"

Tue, 05/06/2014 - 12:59 | 4732354 Dr. Engali
Dr. Engali's picture

I'm always hesitant to think that way, but sometimes I just have to wonder.

Tue, 05/06/2014 - 13:08 | 4732391 cougar_w
cougar_w's picture

If it's true, then so be it. I've given up trying to be fair about it.

We are in the grip of a historical trajectory that was set in motion 900 years ago.

Tue, 05/06/2014 - 13:13 | 4732409 Dr. Engali
Dr. Engali's picture

It sure is hard to deny that fact. Some thresholds are difficult for me to cross.

Tue, 05/06/2014 - 13:19 | 4732431 fonzannoon
fonzannoon's picture

why Madoff? He was a private ponzi. people could opt not to "invest" with him. i'd start with the people forcing everyone into the mandatory public ponzi's.

Tue, 05/06/2014 - 13:25 | 4732451 cougar_w
cougar_w's picture

You'll get nowhere asking a cat why.

To your point however the knives cut all directions. Perhaps you would prefer some Jon Corzine with your tiger today?

How about a little Paul Krugman with that Corzine?

So much to devour for just one tiger. So I had to bring in a backup:

Yes it is very much insane. And the problem is -- what?

Tue, 05/06/2014 - 13:26 | 4732469 fonzannoon
fonzannoon's picture

can we at least get a suggestion box going?

My top 3 would be

1)Ron Insana

2) Blankfein

3) the guy who sometimes works at the deli near me


Tue, 05/06/2014 - 13:34 | 4732510 cougar_w
cougar_w's picture

I see you've taken up comedy.

Blankfein it is.

I was going to do Putin, but my tiger fell in love with him instead they went out for drinks and it took all afternoon to get her back on the set. Silly thing.

Tue, 05/06/2014 - 13:40 | 4732537 fonzannoon
fonzannoon's picture

i'd be afraid insana would cause the tiger massive indigestion. Blankfein is the right choice. 

Tue, 05/06/2014 - 14:10 | 4732676 cougar_w
cougar_w's picture

I have to be careful of the fine people at PETA. They've already given me notice that teaching a tiger to murder people is suspect treatment. I only pointed out that I haven't trained her to do anything of the kind, it just sort of came naturally. She being after all an apex predator familiar with eating anything that moves. To which they had no ready answer, their representative being at that very moment too busy being eaten.

She has sensible tastes, for a mindless destroying machine.

Tue, 05/06/2014 - 13:36 | 4732518 Frank N. Beans
Frank N. Beans's picture

what happened 900 years ago that set this in motion?  link?


Tue, 05/06/2014 - 13:42 | 4732544 fonzannoon
Tue, 05/06/2014 - 14:05 | 4732655 Frank N. Beans
Frank N. Beans's picture

good one

Tue, 05/06/2014 - 14:27 | 4732755 cougar_w
cougar_w's picture

900 years ago "high finances" was invented to help fund (and profit from) the 200 or so years worth of Christian Crusades to the Holy Lands.

A lordling could secure a loan in France from one financier and venture onto the road with nothing but a letter of credit to the effect, and take money from an associate financier at the desitination to buy soldiers, arms and ships. This contrasted with how kings did things which was to travel with a chest of treasure, or even an entire train of treasure mules. You can imagine the risks.

And since that time it has been nothing but credit. I'm sure there are some debts (financial and personal)  from the 1200's still being paid down. You have to wonder how that works out for the rest of us.

Tue, 05/06/2014 - 20:07 | 4734181 Frank N. Beans
Frank N. Beans's picture

cool beans

Tue, 05/06/2014 - 13:17 | 4732419 Bay of Pigs
Bay of Pigs's picture

Anyway you slice it Doc, its so fucking disgusting and embarrassing that it cannot be ignored.

Do NOT follow this link or you will be banned from the site!