Top hedge fund managers made $14.4 billion in 2011: a 35% pay cut

By Tiffany Hsu

March 30, 2012 9:19 AM PT

Ray Dalio of Bridgewater Associates took home $3.9 billion last year. Fellow investment kings Carl Icahn and James Simons each made off with more than $2 billion. To the average plebeian, that’s a lot of money.

But for the top 25 hedge fund earners in the U.S., 2011 was the year that they collectively took a 35% pay cut and suffered one of the least profitable periods in their history, according to an annual ranking from investment magazine AR.

Blame the European debt crisis, which roiled markets around the world and made timing the markets even more difficult than usual.

Overall, the pool of managers made $14.4 billion last year, down from more than $22 billion the year before, or $576 million each on average. In 2010, that figure was $883 million; in 2009, it was $1.1 billion.

Dalio, chief investment officer of his Connecticut firm – the largest hedge fund in the world with $70 billion in assets under management – topped the list.

He was followed by Icahn of Icahn Capital, an activist investor who has butted heads with companies such as natural gas producerEl Paso Corp., with $2.5 billion. Next came Simons of Renaissance Technologies Corp. with $2.1 billion (and returns in the mid-30s for his two main funds).

Outside of the multibillion-dollar trio, Kenneth Griffin of Citadel wrapped up the year with $700 million, followed by SAC Capital Advisors’ Steven Cohen’s $585 million.

Though the average hedge fund slipped 2% last year, seven of the eight top earners landed double-digit net gains for their funds (all of them garnered double-digit gross returns).

But 15 members of 2010’s list were absent last year, including George Soros and former leader John Paulson, who racked up $4.9 billion in pay in 2010 but apparently failed to replicate his success in 2011.

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