Hedge fund managers are beset by media scrutiny of their enormous salaries, investor pushback on the ridiculously high fees (typically "two and twenty"), recent poor performances, and governmental attempts at disclosure and regulation. Despite the seemingly insurmountable negative headlines and class warfare their salaries warrant, those hedge fund managers consistently at the top (and there is a discernible hierarchy within the hedge fund industry) are the stars of the finance industry. But not all hedge fund managers are hailed, nor do all survive. Actually, many fail. But the ones that do survive tend to make a big impression. We’ve compiled a list of the ten most famous hedge fund managers, in no particular order.
- Steve Cohen founded the former SAC Capital, now Point 72 Asset Management. How many investors can have their firm plead guilty and several former employees convicted of insider trading, be investigated personally although not criminally charged by the SEC for insider trading, and still make $1.3 billion in 2014, according to Forbes? Although banned from managing external assets, Cohen is still managing the assets of his family and employees, which, while substantially less than the billions managed at SAC, are still a significant amount.
- George Soros started his first fund in 1969 and became the unofficial founding father of hedge funds. Although the firm no longer manages external assets, he continues to be intimately involved in his family fund. He has become the teacher to many and will always be known for his philanthropic endeavors, financial savviness and his most famous short of the British pound, which earned him the moniker “the man who broke the Bank of England”.
- James Simmons, founder of Renaissance Technologies, is perhaps the most well known mathematician of the group. The flagship Medallion fund is the most elusive and secretive of his funds and it has consistent returns. Simmons, a retiree like Soros, continues to be involved in the firm and benefit from the success.
- Daniel Loeb, founder of Third Point Capital, should be nicknamed “the activist” for the dogged nature he goes after companies. He is not content with owning or shorting stocks, but wants a chance to influence companies from appointed board positions.
- Carl Icahn is one of the most influential investment minds in the world. If Loeb is “the activist” than Icahn is the “father of activism.” He has both a powerful presence and the confidence to make large bets based on his conviction.
- Kenneth Griffin, like another well-known entrepreneur-turned-CEO, Facebook’s Mark Zuckerberg, started his career while attending Harvard. His trading acumen was first tested as a college student, and he continued to hone his skills as CEO of Citadel, the firm he founded in 1990.
- David Tepper has found a strong liking for distressed companies. His Appaloosa Management seems to know which companies or industries will or will not fail, implementing a more unique hedge fund strategy. In fact, he made the right call during the global financial crisis, betting the US government would support the big banks—a bet that paid off tremendously.
- John Paulson of Paulson and Co. has made many good calls in his career, but probably the most well known was his bet against the subprime housing market before it imploded. His firm boasts several funds, and his merger arbitrage strategy is sought after.
- Israel (Izzy) Englander’s Millennium Management, founded in 1989, has two unusual traits. First, the firm does not charge a management fee to its clients, and second, its model is a unique blend of strong risk oversight and over 150 trading teams all answering to Englander. But despite Millennium’s success, Englander might be more famous for the recent purchase of a Manhattan co-op for over $70 million.
- William Ackman founded Pershing Square Capital in 2004. It was his second attempt at running a hedge fund after his first one failed. He is known for his activism, currently taking a massive short position and battering Herbalife on a constant basis, opposing rival activist Daniel Loeb of Third Point. He has also gone toe-to-toe with Carl Icahn, even suing this “king” and winning.
The Bottom Line
Whether their funds are winning or not, these "hedgies" know how to get their names out there. From super high returns to outrageous personal gains, the moves of these top ten managers always get noticed.