Now this is what you call a reversal of fortune.
One year after losing 18 percent, Chris Hohn’s TCI Fund Management surged to a 33 percent gain in 2023. As a result, the London-based, sometimes-activist investor personally made $2.9 billion, enabling him to top Institutional Investor’s 23rd annual Rich List — the definitive ranking of the 25 highest-earning hedge fund managers in 2023.
Hohn had qualified for the ranking for eight straight years until he dropped off in 2022. Most of his earnings stemmed from gains generated by his own capital invested in the fund. He received a small amount of fees as TCI had to hit its high-water mark before it could charge a performance fee.
Hohn is one of ten hedge fund managers who lost money in 2022 — large sums in many cases — but still wound up qualifying for the Rich List this year. Several of the ten are still below their high-water marks, including Tiger Global Management’s Chase Coleman and Scott Shleifer and Perceptive Advisors’ Joseph Edelman.
This is possible because under II’s Rich List methodology, managers qualify in two ways: our calculation of gains from their personal capital in their funds and their share of the fees.
Of course, a high-water mark is applied when calculating performance fees but is not applied to individuals’ personal capital. Rather, the annual ranking is a snapshot in time. So whereas a manager may have lost a large amount of personal capital during a down year, he may still see that capital benefit when a fund goes up.
Altogether, the 25 highest earners made a total of $26.085 billion. This works out to an average of $1.043 billion per person. The median earner made $750 million.
As a result, 2023 was the third-most-profitable year for the 25 highest earners, slightly behind the total in 2021. The best year was 2020, when the top 25 made a total of $31.71 billion. This year, 11 of the 25 made at least $1 billion.
In 2022, the ranking was devoid of stock pickers; however, this year’s ranking includes investors deploying a wide range of strategies. That said, the four highest earners behind Hohn are all multistrat or eclectic investors who roam the wide world of investing for the most attractive opportunities. Multistrat rivals Izzy Englander of Millennium Management ($2.8 billion) and Ken Griffin of Citadel ($2.6 billion) rank second and third, respectively.
Renaissance Technologies’ Jim Simons finishes seventh, with $1.3 billion, enabling the quant GOAT to maintain the distinction of being the only manager to qualify for the Rich List in all 23 years.
Six of the 25 have roots in Julian Robertson Jr.’s Tiger Management family. All lost money in 2022, but their large net worth enabled them to qualify in 2023 based on gains on their own capital.
