Trader Mag: The List

In the end,Arnold and his team of 10 traders — including right- hand man Michael Maggi and natural-gas guru Bill Perkins — walked away from the dustpile with a mountain of cash. Amaranth was wiped off the map.

Arnold claimed the bulk of the profits. He guided Centaurus to gaudy returns (on an estimated $2billion in assets) of 317 percent before fees. Apart from one “lousy”year (only 178 per- cent in 2005), the fund has always finished above 200 per- centsince inception in 2002.

Centaurus’s fee structure is 3-and-30. About half the fund is Arnold’s own money. He is the sole owner of the firm. And — good gosh almighty, what a year — he even got hitched to a beautiful Houston lawyer.

“Last year, it all came down to natural gas,” says one trader familiar with Arnold’s bonanza. “Some people had one idea about what it would do; others backed a different scenario. The bottom line is that a whole lot of money changed hands. When you start hearing from other traders that people are selling bonds just to meet margin, that’s when you know that some positions are too big and it’s all over.”

Arnold declined to comment on our income estimates, as did Centaurus’s Perkins, though Perkins shared his views on why a trading bounty is such a beautiful thing. “You ask a big CEO what he makes, and it’s a huge number, but it’s all tied up in stock and options. Traders get paid in cash. It’s liquid. It’s real. You can go, ‘Here, look,’ and slap someone across the face with it.”

Given Arnold’s record 2006 — the largest sum, we believe, anyone has ever earned in one year — a slap like that just might land someone in intensive care.