9/23/2008

Local fund managers grotesquely underpaid

Below is an article showing how well off American and European fund managers are being paid in year 2007 alone. Top on the list is John Paulson at US$3.7bn, second was George Soros at US$2.9bn and third was James Simon at US$2.8bn. We should quickly raise the pay for our local fund managers before they all ran to America and Europe. American hedge fund billionaire John Paulson 'American hedge fund billionaire John Paulson was his industry's biggest earner in 2007 thanks to a bet against sub-prime mortgages that netted him $3.7bn (£1.9bn) in personal profit. As the world's biggest banks reeled in the face of the credit crunch last year, the top five hedge fund earners took home at least $1.5bn apiece after their funds gambled the right way in exceptionally volatile markets. Hedgie Paulson's made it, now he must spend it. A survey by US hedge fund magazine Alpha, published yesterday, said the five - Mr Paulson, George Soros, James Simons of Renaissance Technologies, Philip Falcone of Harbinger Capital and Kenneth Griffin of Citadel - all individually earned more than the $1.2bn that JPMorgan will spend to buy Bear Stearns, the most high profile victim of the crunch. Mr Paulson, himself a former managing director at Bear Stearns, stole the crown after setting up the $150m Paulson Credit Opportunities Fund in June 2006 to short sub-prime mortgage-backed assets. Where other investors bet against the entire sub-prime index, Mr Paulson's team drilled down to the individual CDOs, delivering net returns of 590pc for investors in the fund by the end of the year. Number two on the list - 77-year-old Mr Soros, who called the dotcom bust - also owes his $2.9bn payday to his bets against sub-prime, as does ex-Barclays Capital man and Harbinger founder Mr Falcone, who pocketed $1.7bn. Hedge fund traders needed to earn at least $210m to reach the top 50, a feat achieved by eight London-based traders. Top of the UK's hedge fund performers, at number 13 with $450m, was the head of Atticus Capital's fund, David Slager. Others include GLG Partners' co-founders Noam Gottesman and Pierre Lagrange, who made $350m apiece, while star trader Greg Coffey made $300m. This was on top of the hundreds of millions of dollars the trio made when they listed GLG on the New York Stock Exchange last year. But GLG has entered more treacherous waters. News emerged yesterday that Mr Coffey - a specialist in emerging markets - unexpectedly handed in his resignation at GLG earlier this week, sending the fund's shares plunging by 12.5pc to $8.75. The GLG partner rescinded his resignation on Tuesday, but is locked in talks with Mr Gottesman and Mr Lagrange about his future, with no guarantee he will stay on.' I would like to give credit to the source of this article. Unfortunately the source was not disclosed.

8 comments:

Mockingbird said...

Did Ho Jinx bet the right way or wrong way by investing Temasek's funds into Merril Lynch?

Anonymous said...

Sorow burnt his pants hanging onto zillions of worthless lehman shares.

redbean said...

it is investment in big time. or is it big time betting?

gacktan said...

http://theonlinecitizen.com/2008/09/protecting-the-small-investors/

yeap we should pay them more so they will probably burst our bubble here

Anonymous said...

There is too much pride involved, you think they will heed over and admit mistakes? or will they continue their pathetic silence?... I am wondering how they missed the "buzz" .. that so many banks are going bankrupt or why they leap so fast .. they missed ther buzz? .. I thought we brought in ALOT of talent to help us smell that "buzz". OK we need MORE MORE foreign talent who can smell the "buzz" better the next time. (or smell your wealth?)

redbean said...

the people involved in those sleazy products should be brought to justice. good that the FBI is investigating. if fraud is involved, make sure they return their millions and billions.

Anonymous said...

The FBI is investigating fund managers/investment bankers for fraud, so it appears that the more they are paid the more corrupt they become. How come? I was taught to believe that if you pay people well, they will be incorruptible.

redbean said...

not quite right. they are paid more because of their supertalents.

bet you, if any one of them is charged, his value will increase and will be employed immediately by countries hungry for their talents.