When it comes to the top-earning hedge fund managers across the country, Institutional Investor’s Alpha tabulates and ranks the top performers each year. Alpha has been tracking the 25 highest-earning managers for 16 years in a row, and, as usual, some interesting trends and patterns have emerged. Notably, this year’s class earned a total of $11 billion in 2016. While this is an astronomical figure, it nonetheless represents the lowest combined earnings total for this particular group since 2005. It is just over half of the total of $21 billion that the 25 top-earning managers pulled in for the year 2014.
2016’s top earner in the hedge fund world was James Simons of Renaissance Technologies. Simons brought in $1.6 billion in earnings for the year, ensuring Renaissance’s position at the top of the list. Renaissance has capitalized on its long history of computer-based analytics and trade decisionmaking to take advantage of the increasingly difficult position that hedge funds find themselves in.
In a list of top-earning hedge fund managers, one is always likely to find Ray Dalio of Bridgewater Associates toward the top. Dalio’s Bridgewater remains one of the very largest funds in the world, and it maintains that status for a good reason: Dalio and his team are consistently able to bring in stellar returns, even in spite of a climate that has become more and more hostile toward hedge funds. This year, Dalio earned $1.4 billion, placing him in the second position on Alpha’s list.
John Overdeck and David Siegel
Tied for third place on the 2016 list of earners are John Overdeck and David Siegel. Their Two Sigma fund managed to bring in a total of $750 million in earnings for 2016, ensuring them a spot toward the very top of Alpha’s ranking.
Coming in at fifth place on the list is David Tepper of Appaloosa Management. Tepper saw earnings for 2016 of $700 million.
Ken Griffin of Citadel dropped in the ranking this year, earning only $600 million. While $600 million is still a major take, particularly in light of the difficulties facing many hedge funds, Griffin’s drop has caused some concern among analysts and supporters of the hedge fund world.
2016 was a challenging year for funds, as evidenced by the fact that only two funds managed to break the $1 billion threshold in earnings. Dropping past second place on the list, the earnings also fall precipitously. The overall list of 25 includes 13 earners from Alpha’s list in 2015. Dropping from this year’s list are Chase Coleman of Tiger Global Management, O. Andreas Halvorsen and Daniel Sundheim from Viking Global Investors, and Lone Pine Capital’s Stephen Mandel, Jr.