It still pays to be a hedge fund manager.
According to Bloomberg’s Billionaires Index, the top 10 hedge fund managers earned a combined $7.7 billion U.S. in 2018.
Some say the hedge fund managers’ compensation is worth it given their investing track records and the returns they provide for clients. Data from Bloomberg shows that the top hedge-fund earners of 2018 performed significantly better than the average investment manager last year. Citadel’s flagship Wellington fund, for example, posted a 9.1% return, while the average fund lost 6.7% for the year, slightly worse than the S&P 500 Index.
Similarly, RenTech’s Institutional Equities Fund gained 8.5% in 2018, while its Medallion vehicle fund, which is closed to outside investors, performed even better. Element Capital Management had a banner year, posting a 17% return for its macro hedge fund.
While the returns are impressive, the reality is that 2018 wasn’t a particularly good year for the hedge fund industry. Closures outnumbered launches in 2018 for the third year in a row, according to Eurekahedge, and investors continued to pressure managers to cut the hefty fees they charge.
