Alpha Magazine Crowns the Kings of Cash

The annual lists of the highest paid feet on the Street always dazzle. Blame Michael Milken; I am still shocked over the $550 million payday he pulled down in the late 80's.

That number was the gold standard for many years; and remains impressive, inflation adjusted. But the bar has been raised by John Paulson and others. And while Trader Monthly's list gets plenty of attention, Alpha Magazine is setting the record straight, at least as far as George Soros is concerned.

The old man has still got it:

John Paulson earned a record $3.7 billion last year to top Alpha's ranking of the 50 most highly paid hedge fund managers. The Paulson & Co. chief surpassed perennial powerhouses George Soros and James Simons, who ranked second and third, at $2.9 billion and $2.8 billion, respectively. The top 25 on the list earned an average $892 million, up from $532 million in 2006.

Paulson rocketed to No. 1 in Alpha's seventh annual survey by shorting the subprime mortgage market. He, Soros, Simons and the others who earned more than $1 billion — Philip Falcone and Kenneth Griffin — led what may well prove to be the greatest display of individual wealth creation in any year in the modern history of finance. Alpha Magazine

SellSiders looking to score brownie points with Raj Rajaratnam of Galleon Group and Mark Kingdon of Kingdon Capital Management might want to take them out for a drink and lift their spirits; they fell off Alpha's list this year despite pulling down $200 million.

The cutoff was $210 million.

• Five of the managers on this year’s list each made more in 2007 than the $1.2 billion that JPMorgan Chase & Co. agreed to pay for the almost failed 85-year-old Bear Stearns Cos.

• When we published our inaugural list, in 2002, Soros led the way with $700 million, a showing that this year would have put him at No. 9. Back then it took $30 million to crack the top 25; this year, $360 million.

• The grand total earned by the top 25 in our 2003 ranking, almost $2.8 billion, was less than what any of the top three managers made this year and less than one fifth of what the top ten made altogether ($16.1 billion).

• Though we doubled the size of our list from 25 to 50 this year, longtime New York–based star managers Mark Kingdon of Kingdon Capital Management and Raj Rajaratnam of Galleon Group both miss the cut, despite each making about $200 million. This year’s minimum: $210 million.

Life is good for the Kings of Cash, as evidenced by Mr. Paulsons latest acquisition, a $41.3 million compound in the Hamptons.

All of this amuses Bill Gross, who predicts hedge fund fee structures are due to compress. Bill took time to lay out his thesis today over the future of the asset management industry, after selling more stamps in his collection. His philanthropic efforts are notable, and he has peeled off nearly $20 million of stamps to donate to charity over the past year.

The Kings of Cash
Alpha Magazine

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Hamptons Real Esate Blog

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