Trader Monthly’s Top 100 for 2007 Unveiled
Trader Monthly's annual list of the top 100 earners on Wall Street has always generated a bit of controversy. There are many estimates involved, and given the variables involved, a reasonable approximation. The price of entry this year was $75 million, with six studs clearing the $1 billion mark. And while there will be an embarrassment of riches, embarrassments are sure to follow as several notable managers are sure to fall off the list, given their numbers were, well, listless.
1) John Paulson, New York, Paulson & Co. Estimated 2007 Income: $3 billion+
2) Phil Falcone, New York, Harbinger Capital Partners Estimated Income: $1.5–$2 billion
3) Jim Simons, New York, Renaissance Technologies Corp. Estimated Income: $1.5–$2 billion
4) Steve Cohen, Connecticut, SAC Capital Advisors Estimated Income: $1–$1.5 billion
5) Ken Griffin, Chicago, Citadel Investment Group Estimated Income: $1–$1.5 billion
6) Chris Hohn, London, The Children’s Investment Fund Estimated Income: $800–$900 million
7) Noam Gottesman, London, GLG Partners Estimated Income: $700–$800 million
8) Alan Howard, London, Brevan Howard Asset Management Estimated Income: $700–$800 million
9) Pierre Lagrange, London, GLG Partners Estimated Income: $700–$800 million
10) Paul Tudor Jones, Connecticut, Tudor Investment Corp. Estimated Income: $600–$700 million
While the list is full of smart folks, Jim Simons is arguably the brightest of the bunch. But while his Medallion fund, which is primarily a vehicle for Renaissance Technologies employees, was up an estimated 70% on the year, his Renaissance Institutional Equities Fund (RIEF) was essentially flat, which is not likely to sit well with clients. Apparently not all algorithms are created equal.
And there is no surprise at the top of the list. Congratulations, John Paulson.
It’s hard to believe that a sitting Treasury Secretary could come to be known as “the other Paulson” in Wall Street circles, but that’s just how large a shadow John Paulson casts these days, with all due respect to the former CEO of Goldman Sachs. In the wake of Paulson’s pulverizing subprime mortgage-backeds short — which, at this point, is thought to have forced God Himself to sell off liquid assets — Paulson suddenly finds himself elevated to a place that transcends a mere cabinet post.
A Queens native, NYU valedictorian, Harvard MBA and former Bear Stearns investment banker who launched his merger-arbitrage hedge fund in 1994 with a few million dollars, Paulson toiled mostly under the radar for many years. We caught wind of him last year as he secured a spot on the Trader Monthly 100 with an estimated 2006 income of $100–$150 million — or, compared to his 2007 haul, cab fare.
Should he ever expect to rid himself of all that dough, Paulson will require several lifetimes. Indeed, the stash he raked in last year will surely be talked about for generations. Betting that the shakiest section of the mortgage market would buckle and then disintegrate, Paulson set out midway through 2006 to take advantage of his hypothesis, setting up limited partnerships on- and offshore, garnering highnet- worth investors, scouring available MBS information, crunching the numbers and ultimately pouncing, shorting the riskiest CDO tranches and wallpapering his offices with credit default swaps. One of Paulson’s funds, Credit Opportunities II, started the year with $130 million and finished it with $3.2 billion.
As the chief steward of credit strategies, Paulson’s partner in subprime shorting, Paolo Pellegrini, was in line to get a significant taste of the history-making score. Early reports indicated that Paulson, whose firm’s assets are now in the neighborhood of $29 billion, profited between $3 billion and $4 billion in 2007. A spokesman for Paulson refused to confirm the figure for us. Paulson himself similarly declined to comment. We’ve since heard that his total take-home was closer to $3 billion, though the smoke is, of course, still clearing. The result, regardless, is still a payday that eclipses anything we’ve ever come across.
Rich Blake and the gang at Trader Monthly will introduce to a few of these folks every day. You might not be able to make the list, but you can read it by registering for a password.
Top 100 Highest Earning Traders
Trader Daily
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