Record payday for hedge fund elite
February 23, 2021 - The top ten titans of the trading floor earned $20.1 billion during the pandemic year of 2020. According to the Institutional Investor, that’s a 50 percent rise from $13.4 billion in 2019.
Once the rock stars of the financial industry, hedge funds have had their public image bruised recently. That ten people -- all of them men -- could earn so much so quickly starkly illustrates the widening rift between the ultra-rich and everyone else.
As tens of millions lost their jobs under an onslaught of the coronavirus pandemic, the top ten hedge funds made average gains of 43 per cent in 2020.
Coatue Management made a fund return of 65 per cent, boosting Philippe Laffont’s earnings from $190 million in 2019 to $1.6 billion last year. Renaissance Technologies’ James Simon earned $2.6 billion last year as his fund gained 76 per cent, data from Institutional Investor showed.
According to Institutional Investor, all of the top 10 hedge fund managers made over $1 billion in 2020, compared with eight in 2019.
These earnings highlight “the disconnect between the stock market and the real economy,” said Reena Aggarwal, a finance professor at Georgetown University. While high volatility and low-interest rates buoyed hedge funds, much of the population struggled “with worries about health, jobs, mortgage payments and student loans,” Aggarwal said.