2016’s Top Earning Traders & Hedge Fund Managers

traders
OK, lets get jealous here since, unless you are one of the 25 superstars on this list, there has to be a slight feeling of inadequacy. But wait, 10 of those 25 are QUANT firms so it would seem the rich fund managers got the cash but the “robots” are the true geniuses. Congrats to all 25 and I think I am going to teach Suri about trading.

(Bill Taylor/CEO)

“Both a quantitative trading genius and a trader who recently stopped managing client money top Forbes’ list of the 25 highest-earning hedge fund managers and traders of 2016. James Simons and Michael Platt each personally made an estimated $1.5 billion last year and the way they did it speaks volumes about where the struggling hedge fund industry is these days.

Simons is chairman of the hedge fund firm he founded, Renaissance Technologies, which manages $36 billion. He continues to benefit from Renaissance’s funds, particularly the secretive Medallion that is not open to outside clients. Renaissance’s biggest hedge fund, the $15 billion Renaissance Institutional Equities fund, was up 21.5% net of fees in 2016.

Simons helped usher in the quantitative trading wave that has been building for decades and is now dominating the hedge fund world, leaving most of the firms that rely primarily on human decision-making in the dust. The majority of the 10 top-earning hedge fund managers and traders of 2016 to a greater or lesser extent use computers and systems-based approaches to trading financial markets.

Meanwhile, Platt has dozens of humans organized into professional trading teams working at his London-based BlueCrest Capital Management. But last year the teams were only trading Platt’s money after the billionaire returned all $7 billion of outside cash BlueCrest managed to clients and turned his firm into a super-sized family office.

Platt was following in the footsteps of many prominent hedge fund billionaires who have stopped managing client capital, like George Soros, Stanley Druckenmiller and Steve Cohen. A former JPMorgan trader, Platt had set up BlueCrest in 2000 and grew it into a $35 billion hedge fund firm, but disappointing returns and transparency concerns caused many investors to yank their money out of BlueCrest. With assets down dramatically, Platt in 2015 figured it was not worth keeping his remaining client cash because of the restrictions placed on things like leverage that came with it. In 2016, Platt’s firm returned 50% net of costs, thanks to highly leveraged bets on interest rates…”

Read Full Article at Forbes