Citadel's Kenneth Griffin (Photo : Reuters)
The top 25 U.S. hedge fund managers in 2014 received $11.62 billion in total compensation. Kenneth Griffin of Citadel ranked first as the highest paid at $1.3 billion, according to a new industry survey.
While hedge funds used to be the biggest moneymakers in the world of finance, they now have return percentages averaging in low single digits. In comparison, the S&P 500 posted a 13.68 percent gain in 2014.
Nonetheless, the men in the Top 25 list still run gigantic firms. Their influence extends to political campaigns and central banking.
The top 3-earning hedge fund managers in 2014 each received compensation over $1 billion. Griffin, the largest earner, launched his trading career from his college dormitory during the 1980s.
Interestingly, the Top 25-paid hedge fund managers actually had a fairly unimpressive year. They earned about 50 percent of the $21 billion in compensation they received in 2013.
The yearly Top 25 rankings were by International Investors Alpha magazine. It stated that last year was one of the "worst" ones for such top-tier investors since the Great Recession started in 2008.
For example, the biggest compensation among hedge fund managers in 2013 was $3.5 billion, $2.2 billion higher than this year's top spot. Also, the managers ranked in the top 3 spots for payouts in 2013 were not in the top 10 in 2014's rankings, according to Australian Financial Review.
The biggest leap in the yearly survey was by William Ackman. He returned 40 percent to investors, and his $950 million earnings propelled him to the fourth spot, according to Reuters.
The payout estimates are based on the stakes of the mangers in their respective firms, and the fees that they charge. Usually hedge funds pay a 2 percent yearly management fee, and 20 percent of all profits earned.
This was the sixth year in a row hedge funds performed worse than the stock market. However, the industry is worth an incredible $2.9 trillion, and this year has already earned $18.2 billion in fresh capital.
