
Now this is what you call a reversal of fortune.
One year after losing 18 percent, Chris Hohn’s TCI Fund Management surged to a 33 percent gain in 2023. As a result, the London-based, sometimes-activist investor personally made $2.9 billion, enabling him to top Institutional Investor’s 23rd annual Rich List — the definitive ranking of the 25 highest-earning hedge fund managers in 2023.
Hohn had qualified for the ranking for eight straight years until he dropped off in 2022. Most of his earnings stemmed from gains generated by his own capital invested in the fund. He received a small amount of fees as TCI had to hit its high-water mark before it could charge a performance fee.
Hohn is one of ten hedge fund managers who lost money in 2022 — large sums in many cases — but still wound up qualifying for the Rich List this year. Several of the ten are still below their high-water marks, including Tiger Global Management’s Chase Coleman and Scott Shleifer and Perceptive Advisors’ Joseph Edelman.
This is possible because under II’s Rich List methodology, managers qualify in two ways: our calculation of gains from their personal capital in their funds and their share of the fees.
Of course, a high-water mark is applied when calculating performance fees but is not applied to individuals’ personal capital. Rather, the annual ranking is a snapshot in time. So whereas a manager may have lost a large amount of personal capital during a down year, he may still see that capital benefit when a fund goes up.
Altogether, the 25 highest earners made a total of $26.085 billion. This works out to an average of $1.043 billion per person. The median earner made $750 million.
As a result, 2023 was the third-most-profitable year for the 25 highest earners, slightly behind the total in 2021. The best year was 2020, when the top 25 made a total of $31.71 billion. This year, 11 of the 25 made at least $1 billion.
In 2022, the ranking was devoid of stock pickers; however, this year’s ranking includes investors deploying a wide range of strategies. That said, the four highest earners behind Hohn are all multistrat or eclectic investors who roam the wide world of investing for the most attractive opportunities. Multistrat rivals Izzy Englander of Millennium Management ($2.8 billion) and Ken Griffin of Citadel ($2.6 billion) rank second and third, respectively.
Renaissance Technologies’ Jim Simons finishes seventh, with $1.3 billion, enabling the quant GOAT to maintain the distinction of being the only manager to qualify for the Rich List in all 23 years.
Six of the 25 have roots in Julian Robertson Jr.’s Tiger Management family. All lost money in 2022, but their large net worth enabled them to qualify in 2023 based on gains on their own capital.
Steady Izzy indeed. Millennium is rarely the best multistrategy performer, but it continues to post returns that rank near the top of the strategy. It gained about 10 percent in 2023. Millennium has more than 320 investment teams managing $62.2 billion in four major strategies: relative-value fundamental equity, equity arbitrage, fixed income, and quantitative. Last year, the firm changed its fee terms, adding an asset-based levy of approximately 1 percent, to be credited against any performance charges that are generated. Until now, Millennium had charged only a performance fee, which was calculated after all of the firm’s expenses, a common arrangement among major multistrategy funds. Talks about a possible partnership or business arrangement with Schonfeld Strategic Advisors, meanwhile, broke off in late 2023. Englander ranked second on the Rich List in each of the two previous years after topping the ranking in 2020.
Tepper’s Carolina Panthers pro football team was a disaster on the field last year. But the hedge fund titan qualified for the Rich List for the 20th time after racking up a better than 18 percent gain. That performance was driven by four Magnificent Seven stocks: Nvidia, Meta Platforms, Microsoft, and Amazon, which were Appaloosa’s biggest positions at year-end, accounting for roughly 40 percent of the firm’s U.S. common stock long assets. Tepper is an opportunistic investor seeking the juiciest opportunities in most markets at any given time. Before year-end, Appaloosa was managing about $17 billion. But each year, Tepper typically returns about half of the firm’s gains to investors. Since its 1993 inception, Appaloosa has posted a gross annualized return of more than 28 percent, with a net return between 23 and 25 percent, depending on the investor.
Cohen is another hedge fund honcho who owns a sports team that suffered a disappointing 2023 season. His New York Mets finished fourth of five teams in their baseball division despite a massive payroll. But last year, Point72 gained 10.6 percent, making it one of the top-performing multistrat funds. It has more than 185 money management teams overseeing more than $32.3 billion. Its largest strategy, by both assets and head count, is discretionary long-short equities. Others include Cubist Systematic Strategies, which engages in automated trading in many liquid markets; a global macro business that makes discretionary investments; and a private venture capital business. In recent years, Point72 has aggressively built up its macro trading teams. At year-end, its four largest U.S. common stock longs were Magnificent Seven members Nvidia, Microsoft, Amazon, and Meta.
Laffont is among ten hedgies — and six Tiger Management descendants — to qualify for the Rich List after suffering huge losses in 2022. Coatue gained 21.5 percent in 2023, with its long-only fund surging 55 percent as the equity markets rebounded. Six of its ten largest U.S.-listed longs at the end of the third quarter and five of its top seven at year-end were Magnificent Seven members. Nvidia, Meta, and Amazon accounted for roughly one-quarter of the fund’s assets for most of the year. Coatue, which operates a separate venture capital business, last year raised money for Coatue Ventures III. The firm had been seeking as much as $500 million for the new fund, The Information reported. The venture business focuses on the earliest stages of seed and Series A funding, according to Coatue’s website.
Last year was a rough one for Renaissance’s public computer-driven hedge funds. RIDA lost 70 basis points and RIDGE was essentially flat, although RIEF gained 7.5 percent. Even so, the 85-year-old mathematician and founder of Renaissance maintained the distinction of being the only hedge fund manager to qualify for the Rich List in all 23 years. “Simons is one of a kind,” Theodore Aronson, a partner at quantitative money manager AJO Vista, told II last year. “He’s made more money than God, and has made more money than God for others.” Last June, the Simons Foundation announced a $500 million endowment gift to Stony Brook University, which Simons and his wife, Marilyn, graduated from and where Simons had served as chairman of the math department. Over the years, he has given the university substantial sums. The latest gift was deemed the largest unrestricted donation to an institution of higher education in U.S. history.
Two Sigma’s co-founders qualify for the Rich List for the third straight year after their two largest computer-driven funds posted relatively strong results. Two Sigma Absolute Return Enhanced fund, a mostly systematic equity market-neutral fund, rose 12 percent and the firm’s equity quant fund, Two Sigma Spectrum, was up 8.6 percent. The normally low-profile $60 billion firm was thrust into the spotlight last year when it made the highly unusual disclosure in a regulatory filing that the management committee — comprised only of Overdeck and Siegel — “has been unable to reach agreement on a number of topics,” including defining roles, authorities, and responsibilities for a range of C-level officers, such as the members of the management committee and chief investment officers. The committee warned that the disagreement could affect the firm’s ability to retain or attract employees and “could continue to impact the ability of employees” to complete key tasks, adding that the “ability to achieve client mandates could be impacted over time.” Two Sigma was also rocked by news that a rogue trader was responsible for $170 million in losses.
The Tiger Cub personally made ten figures in 2023 even though most of his investors are still underwater. Last year, Tiger Global posted a 28.5 percent increase in its long-short fund and a 20.4 percent return in the long-only fund. But this performance still left many clients in the red after the long-short fund lost 56 percent in 2022 and 7 percent the previous year and the long-only fund plummeted by 67 percent in 2022. In 2023, Tiger Global had perhaps the highest exposure to the Magnificent Seven among the Tiger group. For most of the year, Meta and Microsoft were the firm’s two largest longs, combining for just over one-third of assets. Alphabet, Amazon, and Nvidia were also among the top-ten holdings. Together, the five stocks accounted for nearly half of the firm’s U.S. long assets. Tiger Global’s once-vaunted separate venture capital business (which it calls private equity) has sharply scaled back its volume of investments. The firm announced late last year that Scott Shleifer (No. 15 on the 2023 Rich List), a co-founder of its private equity business, would transition to the role of senior adviser.
Scott Shleifer was celebrated for years for his role as a co-founder of Tiger Global’s private equity business, which at one time was doing more than a deal a day. But late last year, firm founder Chase Coleman announced that Shleifer would transition to senior adviser at the firm while remaining a partner. The announcement came as many private company valuations have declined, in some cases plummeting, and fundraising strategywide has become much more difficult. “Scott’s decision to make this move after two decades of successful partnership is based largely on geography,” Coleman wrote in a letter to clients, per Bloomberg. “Tiger Global is operating in person out of our New York offices, whereas Scott and his family have made their home in Florida and want to stay there.” Shleifer is among a small group who will sit on a newly formed investment committee for private investments, headed by Coleman. In 2022, Shleifer and his wife, Elena, gave $18 million to his alma mater, the University of Pennsylvania.