Hedge fund bosses took home €18bn in pay

SEVEN of the world’s top hedge fund managers earned 10-figure pay cheques and one set a record for the highest-ever pay-out last year due to a stock market rally that pushed returns to their highest levels in a decade.

Together, the industry’s 25 best paid managers collected a record $25.33 billion (€18.65bn), more than double the amount they took home in 2008 when the financial crisis left many prominent funds nursing heavy losses.

In 2007, the top 25 set a record by taking home $22.3bn.

The annual ranking features the heads of the some of the industry’s oldest and biggest hedge funds.

Analysts had expected the overall increase after the average hedge fund gained 20% and investors began putting new money into the loosely regulated $1.5 trillion industry in 2009.

Hedge fund managers typically earn management fees plus performance fees that can be as high as 50%, helping cement conventional wisdom that it can be extremely lucrative to run a hedge fund.

Some funds delivered dramatically better returns than the average which helped their managers take home billions.

David Tepper’s Appaloosa Management gained more than 130% on his bet that certain bank shares would recover.

Tepper earned a $4bn payout that toppled John Paulson as the industry’s record payout holder. Paulson’s bet that housing prices would fall earned him $3.7bn in 2007.

Paulson, however, still made the list of top earners, ranking in fourth position with a $2.3bn pay cheque.

He followed philanthropist George Soros, whose $3.3bn put him into the number 2 spot, and James Simons, a former mathematics professor, who earned $2.5bn to rank as number 3.

SAC Capital Advisors’ Steven Cohen ranked as the fifth-highest earner with $1.4bn.