“When everyone is running around like a chicken with its head cut off, that’s pretty good for us.” That’s a quote from hedge-fund legend James Simons back in the days of the dot-com bubble in November 2000, but it still applies today.
Yes, the current climate has, indeed, been “pretty good” for Simons and his shareholders — just like most every other climate, it seems.
The founder and chairman of Renaissance Technologies earned $1.7 billion in 2017 to take the top spot on the 17th edition of the Institutional Investor’s annual Rich List. He’s held the crown for three straight years now and is the only individual to qualify for the list every single year it’s been produced.
Here are the top 10 earners:
|1. James Simons||Renaissance Technologies||$1.7 billion|
|2. David Tepper||Appaloosa Management||$1.5 billion|
|3. Ken Griffin||Citadel||$1.4 billion|
|4. Ray Dalio||Bridgewater Associates||$1.3 billion|
|5. Izzy Englander||Millennium Management||$975 million|
|6. Chris Hohn||TCI Fund Management||$775 million|
|7 Daniel Loeb||Third Point||$625 million|
|8. Chase Coleman||Tiger Global Management||$600 million|
|8. David Shawn||D.E. Shaw Group||$600 million|
|10. John Overdeck, David Siegel (tie)||Two Sigma||$570 million|
The 25 top earners pulled in a combined $15.38 billion in 2017, a massive bump of almost 40% from 2016, when the top 25 produced the lowest collective earnings since 2005. The increase in pay only makes sense considering last year’s hedge funds generated their best average performance since 2013.
As for Simons, he continues his stretch of remarkable performance.
The Medallion fund, available only to Renaissance employees, has generated returns of about 40% a year since inception in 1988. And that’s after a 5% management fee and 44% performance fee, which dwarfs the industry-standard 2% and 20%.
Renaissance’s publicly available funds — Institutional Equities, Institutional Diversified Global Equities and Institutional Diversified Alpha Fund — also turned in double-digit gains in 2017.