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This is what is called a reversal of fortune.
Chris Horn’s TCI Fund Management returned 33% in 2023, a year after losing 18%. As a result, the London-based investor, who also works as an occasional activist, personally made his $2.9 billion and was among the top earners. Institutional investor‘s 23rd Annual Rich List — the definitive ranking of the 25 most profitable hedge fund managers of 2023.
Horn remained eligible for the ranking for eight consecutive years before being removed from the ranking in 2022. Most of his earnings came from profits generated by his own capital invested in his funds. He received a small fee because TCI needed to reach the highest standards before it could claim a success fee.
Horn was one of 10 hedge fund managers to lose money in 2022, often with large losses, but still qualified for this year’s list of richest people. Several of the 10 companies are still below their highest levels, including Chase Coleman and Scott Shleifer of Tiger Global Management and Joseph Edelman of Perceptive Advisors.
This is possible because IIIn the rich list approach, a manager’s qualifications are evaluated in two ways. One is the calculation of returns from personal capital in the fund and the percentage of fees.
Of course, the high water mark is applied when calculating performance fees, but not to the individual’s personal capital. Rather, annual rankings are a snapshot in time. So even if a manager loses a lot of personal capital in a down year, he or she may still benefit from that capital when the fund goes up.
The total annual income of the 25 highest earners was $26.085 billion. This equates to an average of $1.043 billion per person. The median income was $750 million.
As a result, 2023 was the third most profitable year for the 25 highest earners, falling just short of 2021’s total. The best year was 2020, when the top 25 companies earned a total of $31.71 billion. This year, 11 out of 25 people made at least $1 billion.
There were no stock pickers in the 2022 rankings. However, this year’s ranking includes investors deploying a wide range of strategies. But all four of Mr. Horn’s next highest earners are multi-strat investors or eclectic investors who roam the wide investment world in search of the most attractive opportunities. MultiStrat rivals Millennium Management’s Izzy Englander ($2.8 billion) and Citadel’s Ken Griffin ($2.6 billion) are second and third, respectively.
Renaissance Technologies’ Jim Simmons came in seventh with $1.3 billion, allowing the quantitative GOAT to retain the honor of being the only manager to qualify for the Rich List in 23 years.
Six of the 25 have roots in Julian Robertson Jr.’s Tiger Management family. All suffered losses in his 2022, but the large net worth allowed him to qualify in 2023 based on return on equity.
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