Money managers under the microscope
Railway porter-turned-billionaire financier George Soros delivered a stark warning last night that the financial world is on the wrong track and that we may be hurtling towards an even bigger boom and bust than in the credit crisis.
The man who ‘broke’ the Bank of England (and who is still able to earn a cool $3.3 bln in a year) said the same strategy of borrowing and spending that had got us out of the Asian crisis could shunt us towards another crisis unless tough lessons are learned.
Soros, who worked as a porter to pay for his studies at the London School of Economics after emigrating from Hungary, warned us to heed the lesson that modern economics had got it wrong and that markets are not inherently stable.
“The success in bailing out the system on the previous occasion led to a superbubble, except that in 2008 we used the same methods,” he told a meeting hosted by The Economist at the City of London’s modern and impressive Haberdashers’ Hall.
Take a bow George Soros, Trafalgar Capital, King Street, Credit Agricole and a host of others.
Those lovely people at Lipper (wholly-owned by Thomson Reuters, I should note) have handed out the gongs for the top hedge funds in 2009. The awards pick out the managers delivering the best consistent returns over three years among participants the Lipper TASS database, divvying up the goodwill between strategies and regions to give a global snapshot of the leading performers.
Four of the world's top hedge fund managers took home 10-figure paychecks last year, even as the loosely regulated industry delivered its worst returns and hundreds of firms were forced out of business.
The industry's 25 best-paid managers collected a total of $11.6 billion, which marked the third-best year on record, according to an annual survey released by Institutional Investor's Alpha magazine. Top on the list was James Simons, a former mathematics professor who runs hedge fund group Renaissance Technologies, with estimated earnings of 2.5 billion.