Top Hedge Fund Earner Dalio Brings Home $3.9 Billion in 2011

The 25 highest paid hedge fund managers raked in a combined $14.4 billion in 2011, about one third less than in 2010, amid a volatile stock market and low investment gains. The market shook up the list of the top 25 highest-earning hedge fund managers, with nearly one third of the top earners new to the list and more than half of last year's top earners no longer qualifying. The top 25 paid hedge fund managers combined earnings decreased from $22 billion in 2010, according to a ranking today by “Absolute Return” magazine. The average pay was $576 million, about $300 million less than $883 million in 2010 and nearly half the $1.1 billion average in 2009. Raymond Dalio, founder of the world's largest hedge fund firm Bridgewater Associates, climbed to the top of the fund manager list by earning $3.9 billion after the company's largest fund posted a 16.05% return. Last year the top earner was Paulson & Co. head John Paulson, who set a record earning $4.9 billion in 2010 and this year didn't make the list despite the lowest minimum requirement in four years, $100 million. $3.9 billion was enough for cell phone operator Verizon Wireless

to purchase 122 licenses for increased wireless spectrum earlier this year, a move which has been critiqued by competitors as concentrating excessive control of the spectrum and is being reviewed by the Federal Communications Commission. Corporate raider-turned-investor Carl Ichan, owner of Ichan Capital Management, was the second highest earning hedge fund manager, raking in $2.5 billion in 2011. He returned outside capital in his fund to investors early last year. For $2.5 billion drug manufacturer Amylin

was able to purchase competitor Inhibitex, a manufacture of experimental hepatitis C drugs, earlier this year. James Simons, nonexecutive chairman and founder of Renaissance Technologies Corp., was the third and final hedge fund manager to earn more than $1 billion. Simons, who retired from leading the firm in 2010, earned $2.1 billion as the company's Renaissance Institutional Equities Fund reversed two consecutive years of losses to climb 34% last year. Kenneth Griffin, Citadel founder, earned $700 million on his firm's more than 20% gain and Steve Cohen, SAC Capital Advisors founder, earned $585 million on his fund's 8% net gain to round out the top five, according to the report. The amount of money earned by leading a hedge fund, even one with poor performance, dwarfs the amount earned by directing other endeavors in the financial sector, including banks and asset management firms. Bank of America

Chief Executive Officer Brian Moynihan received a $7.5 million pay package in 2011 for managing the second largest U.S. bank, the company announced yesterday. Dalio earned 520 times as much.