Hedge fund managers oversee the investments of their respective hedge funds. For hedge fund managers to be successful, they must create a competitive advantage, have a well-defined investment strategy, a high amount of capital, a robust marketing plan, and a strong risk management strategy. Those who become successful make a lot of money annually, like the five highest-paid hedge fund managers in 2023.
Combined, the top 25 hedge fund managers earned $21.5 billion in 2022. These are the top 5 highest-paid managers as of 2023.
Key Takeaways
A hedge fund, which is an investment vehicle that aggregates capital from multiple investors, is normally run by professional management companies.
Successful hedge fund managers tend to be highly paid and can be worth billions of dollars.
In 2023, the five highest-paid hedge fund managers were Ken Griffin of Citadel, Izzy Englander of Millennium Management, Steve Cohen of Point72 Asset Management, David Tepper of Appaloosa Management, and James Simon of Renaissance Technologies.
A hedge fund is an investment vehicle and business structure that aggregates capital from multiple investors and invests in securities and other investment instruments. Professional management companies structured as limited partnerships or limited liability companies normally run hedge funds.
Hedge funds differ from mutual funds in that regulators do not cap leverage, and most of the investments are highly liquid.
Ken Griffin
Ken Griffin, the founder of Chicago-based Citadel, has a history of making headlines for buying penthouses and mansions across the globe, purchasing art, and giving away millions of dollars to charity. His spending has been comfortably financed by strong performances from Citadel’s multi-strategy hedge funds.
In 2022, Citadel recorded the most profitable year ever for a hedge fund, with a return of 153%. Griffin's personal earnings were around $4.1 billion. By 2023, his estimated net worth had reached $35 billion. As of 2023, Citadel had over $57 billion in assets under management.
Israel "Izzy" Englander
Izzy Englander of Millennium Management is a 53-year Wall Street veteran and the second-highest-earning hedge fund manager. Millennium now manages over $58 billion in assets; Englander's fund gained 12.6% in 2022. His personal earnings from his work were $3.2 billion. His total net worth was estimated at $11.5 billion at the start of 2023.
Steven Cohen's firm, Point72 Asset Management, saw gains of 10.25% in 2022 and earned its investors profits of $2.4 billion. Cohen's earnings in 2022 were estimated at $1.9 billion. His total net worth was estimated at $17.5 billion in 2023. Point72 currently manages more than $27 billion in assets for its clients.
David Tepper
David Tepper's Florida-based Appaloosa Management earned investors a return of about 8.25% in 2022. At the beginning of 2023, Tepper's 2022 earnings were estimated at $1.2 billion. At $18.5 billion, estimated at the same time, his net worth is even higher than Cohen's. Appaloosa assets under management currently total over $14 billion.
James Simons
James Simons isthe founder ofthe highly regarded quantitative hedge fund firmRenaissance Technologies.His total hedge fund income was $1.1 billion in 2022. His total net worth is estimated at $28.1 billion.
Simons retired in 2010 but still has a say on howRenaissance is run and makes money from its fund’s performances. The performance of Renaissance’s oldest fund, Medallion, is unknown as it is only open to owners and employees at the company.
Who Is the Richest Hedge Fund Manager?
Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.
How Much Do Hedge Fund Managers Make?
The average salary for a hedge fund manager in the United States is $122,555 per year, with an estimated total pay of $199,035 annually. However, highly successful hedge fund managers can make millions every year, with the median earnings of hedge fund managers reaching $570 million in 2022. The top-earning hedge fund managers, like Ken Griffin and Izzy Englander, earn billions every year.
Why Do Hedge Fund Managers Earn So Much?
Hedge fund managers' earnings are usually based on management fees and a percentage of the profits they earn, known as a performance fee. The more assets they have under management, and the higher the profits they earn for their fund, the more income they make.
The Bottom Line
A hedge fund is an investment vehicle that aggregates capital from multiple investors. These funds are run by professional management companies. The most successful hedge fund managers handle billions of dollars in assets for their clients, and their earnings can reach into the billions as well.
In 2023, the highest-paid hedge fund manager was Ken Griffin of Citadel, who earned $4.1 billion. He was followed by Izzy Englander of Millennium Management, who earned $3.2. billion. The next three highest-paid managers were Steve Cohen of Point72 Asset Management, David Tepper of Appaloosa Management, and James Simon of Renaissance Technologies. Their earnings were all between $1 and $2 billion.
In 2023, the five highest-paid hedge fund managers were Ken Griffin of Citadel
Citadel
Citadel ranks as the eleventh largest hedge fund manager in the world, and in 2023 the second largest multi-strategy hedge fund globally. Citadel's group of hedge funds rank among the largest and most successful hedge funds in the world.
, Izzy Englander of Millennium Management, Steve Cohen of Point72 Asset Management, David Tepper of Appaloosa Management, and James Simon of Renaissance Technologies.
Ken Griffin, the founder of Citadel Investment Group, has been named the top hedge fund manager by LCH Investments recently, in their annual ranking of the world's top 20 hedge fund managers.
Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.
Hedge fund managers typically earn above-average compensation, often from a two-and-twenty fee structure. Hedge fund managers typically specialize in a particular investment strategy that they then use to power their fund portfolio's mandate for profits.
Hedge fund managers often have a master's degree or even a Ph.D.in finance, mathematics, economics, financial engineering, quantitative finance, programming, marketing, or business administration. Others have advanced degrees in a specialty such as engineering or accounting.
Alfred Winslow Jones is cited as creating the first hedge fund strategy in 1949. His thesis was simple but groundbreaking: he sought to separate two risks involved in investing in stocks by creating a market-neutral portfolio. The first, market risk, is caused by changing stock prices as a result of market influences.
Great money managers are the rock stars of the financial world. While Warren Buffett is a household name to many, to stock geeks, the names of Benjamin Graham, John Templeton, and Peter Lynch are cause for extended discourses on investment philosophies and performance.
Kenneth Cordele Griffin (born October 15, 1968) is an American hedge fund manager, entrepreneur and investor. He is the founder, chief executive officer, co-chief investment officer, and 80% owner of Citadel LLC, a multinational hedge fund.
Today Bridgewater is the largest hedge fund in the world and Dalio has a personal fortune of approximately $19 billion. The fund serves institutional clients such as pension funds, foreign governments and central banks, as well as charitable foundations, family offices and high net worth individuals.
BlackRock, Inc. is an American multinational investment company. It is the world's largest asset manager, with $10 trillion in assets under management as of December 31, 2023. Headquartered in New York City, BlackRock has 78 offices in 38 countries, and clients in 100 countries.
In total, Forbes counts 47 hedge fund billionaires who have a combined net worth of $312 billion, up slightly from the same number in 2022 who were worth $310 billion.
Renaissance Technologies' famous but secretive in-house hedge fund doesn't move in step with any market trend. Most people on Wall Street have a tough time explaining the Medallion Fund, managed by the hedge fund company Renaissance Technologies.
The money is a big draw as well: if you're at the right fund and you perform well, you can earn into the mid-six-figures, up to $1 million+, even as a junior-level employee. The top individual Portfolio Managers can earn hundreds of millions or billions each year.
Hedge fund manager salary, then, like in most other fields, has a pyramidal structure. Those at the very top make astronomical amounts. In 2020, for instance, the top 25 hedge fund managers took home over $32 billion in compensation. The average hedge fund manager makes a more modest $145,437 per year.
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