A handful of the City’s leading hedge fund managers shared an extraordinary payout of more than $2 billion last year as star dealers profited from the meltdown in America’s sub-prime mortgage markets.

Top of the UK list of mega-earners for the year were Noam Gottesman and Pierre LaGrange, the two co-founders of GLG Partners, the $24 billion London-based hedge fund.

Mr Gottesman and Mr LaGrange were paid $350 million each, according to Alpha, a hedge fund magazine that yesterday published a list of the 50 best-paid managers worldwide for 2007.

The paydays for the two executives only marginally overshadowed the $300 million in management and performance fees collected by Greg Coffey, GLG’s emerging markets specialist. GLG is locked in a battle to hold on to Mr Coffey, who runs about $7 billion of its funds and generated about 60 per cent of its performance fees last year.

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GLG’s New York-listed shares fell as much as 10 per cent yesterday as investors prepared for Mr Coffey’s departure so that he can set up his own firm.

Alan Howard, the 44-year-old manager at Brevan Howard Asset Management, is the fourth-highest London-based hedge fund earner, collecting $245 million last year, according to Alpha.

David Harding, the former futures trader who sold the AHL fund he founded to Man Group, is next on the City’s hedge fund rich list. He was paid $225 million thanks to his performance at Winton Capital Management.

Three fellow City hedge fund heavyweights were each paid $220 million last year, according to Alpha. They are Michael Platt, of BlueCrest Capital Management, and George Robinson and Hugh Sloane, of Sloane Robinson Investment Services.

Prominent among Alpha’s hedge fund super-rich is David Slager, who runs the European fund of Atticus Capital, which famously took out a $1 billion stake in Barclays and vowed to fight its planned mega-merger with the Dutch bank ABN Amro.

Mr Slager, based in New York, collected $450 million in performance and management fees last year, according to Alpha, which rated him thirteenth in its top 50.

Alpha’s list was topped globally by John Paulson, who received $3.7 billion. Mr Paulson’s firm, Paulson & Co, made a fortune from shorting America’s sub-prime mortgage markets last year. The crisis in sub-prime led to a seizure in the international banking market. The success of his trading meant that Mr Paulson beat George Soros, the best-known fund manager, into second place. Mr Soros, who runs Soros Fund Management, received $2.9 billion, Alpha said.

The magazine set an entry level of $210 million for those hoping to appear on the list of top “hedgies” for last year. The bar was lower than last year’s $220 million but the magazine had to double the list because of the high number of qualifiers.

Details of the extraordinary pay on offer to hedge fund star dealers came as latest research from HedgeFund Intelligence, a publisher, calculated that global hedge fund assets stood at $2.65 trillion at the beginning of the year.

That is 27 per cent higher than the previous year and defies prophecies that the alternative asset management industry would be holed by the sub-prime rout.

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