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.
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.
