Even for this Gilded Age of 0.0001 percenters, Kenneth Griffin drips money.
The hedge-fund mogul recently closed on a New York penthouse for an eye-watering $240 million. Before that he picked up a $122 million London mansion. He can hang his $200 million Pollock in one and his $300 million de Kooning in the other.
Remarkably, all of that cost less than what Griffin made in 2018, when his personal fortune swelled by $870 million to about $10 billion, according to the Bloomberg Billionaires Index, a ranking of the world’s 500 richest people.
More remarkable is how Griffin and many other hedge fund giants mint so much money: with investment returns that are solid, but a far cry from John Paulson’s mammoth housing short or when George Soros broke the Bank of England.
The Bloomberg Billionaires Index’s inaugural ranking of hedge-fund wealth lays bare a truth about the business that, for many, defines what it means to be rich.
Outfits like Griffin’s Citadel and Ray Dalio’s Bridgewater Associates have grown so big by assets that they’ve effectively become printing presses for their ultra-rich owners. The largest funds can now throw off millions or billions of dollars a year in fees.
“We still want the mega funds to produce returns that are better than a typical hedge fund, that’s why we’re willing to pay the 2 and 20 percent fees,” said Tim Ng, CIO of Clearbrook Global Advisors, which invests in hedge funds. “We’re willing to tolerate lower performance from some in a market like 2018 because they have for years outperformed their peers.”
Bloomberg reached out to representatives for all of the firms and individuals on the list. All declined to comment.
The top hedge-fund earners of 2018 performed significantly better than the average manager.
Citadel’s flagship Wellington fund, for instance, returned 9.1 percent last year, while the average fund lost 6.7 percent, slightly worse than the S&P 500 Index.