While many hedge fund managers struggled to beat the market in 2012, most of the managers on Institutional Investor's Alpha's 2012 Rich List ranking of the top 25 hedge fund earners did exceptionally well in navigating the complex global macroeconomic forces.
Four managers topped $1 billion in earnings, led by David Tepper of Appaloosa Management, who returns to the list after a one-year absence. Tepper earned $2.2 billion. The other billion-dollar earners were Bridgewater Associates' Ray Dalio ($1.7 billion), SAC Capital Advisors' Steve Cohen ($1.4 billion) and Renaissance Technologies' Jim Simons ($1.1 billion).
It was tougher to qualify for the Rich List this year than it was last year, with the minimum earnings up from $100 million to $200 million. (The proprietary Rich List survey tabulates earnings from performance fees and management fees; for some of the larger funds, the latter can be substantial.)
Just 11 managers returned to the list from the previous year, though most of them still made enough money ($100 million) to have qualified for last year's list.
Two managers – Izzy Englander ($375 million) and Paul Tudor Jones ($300 million) – made the list despite single-digit returns because they have so much of their own money in their funds.
Stock picking mattered, as evidenced by the fact that on the list there are five Tiger cubs (proteges of Julian Robertson's Tiger Management): They are Rob Citrone, Chase Coleman, Steve Mandel, Andreas Halvorsen and Philippe Laffont.
Several of 2011's top earners dropped from the rolls. Carl Icahn, for example, returned all outside money to investors in 2011, while Centaurus Energy's John Arnold retired, and Brevan Howard Asset Management co-founder Christopher Rokos left his firm in 2012 to start a family office.
Five of the people on the Rich List – Bill Ackman, Lee Cooperman, Ray Dalio, Jim Simons and Tom Steyer – have made the Giving Pledge, agreeing to give away more than half of their money over the course of their lifetime.
