The pay structure of the hedge fund industry is based on the value of the managers’ stakes in their hedge funds and the fees they charge. Though exact figures vary between funds, the standard fee arrangement that investors pay a hedge fund is “2 and 20”, which means 2% of the assets under management and 20% of profits above a predetermined benchmark, like the London Interbank Offer Rate (Libor).
Let’s say a hedgie manages $80 billion in assets. That would translate into an eye-popping $1.6 billion simply for switching on his computer and putting his legs on the table. Even if he had a crappy year and failed to stumble across any alpha, he need not go easy on his caviar and champagne. After all he is skimming off 2% by way of management fees.
The top of 2013's list.
David Tepper: $3.5 billion - Tepper made news a few years ago when he bought an ocean-front mansion in The Hamptons for $43.5 million and then tore it down so that he could reconstruct another. He was allegedly irked that he could not see the ocean from every room of the 6,165 square foot estate. So why not do something about it?
Steven Cohen: $2.4 billion - Cohen’s paycheck funds his art craze. Last year he plunked down a cool $155 million for Picasso’s “Le Rêve” and before that it was $120 million for four bronze sculptures of a woman’s back, created by Henri Matisse over 23 years. According to Institutional Investor’s Alpha, his multi-strategy fund gained 20.5% last year but his firm returned all client money as part of a government settlement of criminal insider trading charges. According to CNN, a federal judge approved a $1.8 billion settlement from the firm, which is inclusive of the earlier $616 million penalty.
From here
Let’s say a hedgie manages $80 billion in assets. That would translate into an eye-popping $1.6 billion simply for switching on his computer and putting his legs on the table. Even if he had a crappy year and failed to stumble across any alpha, he need not go easy on his caviar and champagne. After all he is skimming off 2% by way of management fees.
The top of 2013's list.
David Tepper: $3.5 billion - Tepper made news a few years ago when he bought an ocean-front mansion in The Hamptons for $43.5 million and then tore it down so that he could reconstruct another. He was allegedly irked that he could not see the ocean from every room of the 6,165 square foot estate. So why not do something about it?
Steven Cohen: $2.4 billion - Cohen’s paycheck funds his art craze. Last year he plunked down a cool $155 million for Picasso’s “Le Rêve” and before that it was $120 million for four bronze sculptures of a woman’s back, created by Henri Matisse over 23 years. According to Institutional Investor’s Alpha, his multi-strategy fund gained 20.5% last year but his firm returned all client money as part of a government settlement of criminal insider trading charges. According to CNN, a federal judge approved a $1.8 billion settlement from the firm, which is inclusive of the earlier $616 million penalty.
From here
No comments:
Post a Comment