This year’s shake-up in our annual ranking of the world’s top hedge fund earners is by far the biggest in the list’s eight-year history: Fifteen of last year’s top 25 managers failed to make the ranking this time. Many of them lost hundreds of millions of dollars of their personal wealth, as their funds fell by double digits, and they are unlikely to start collecting performance fees again before 2010.
Several managers who missed the cut this year didn’t perform poorly. Though they were down, they remain positioned potentially to start making money again in 2009. Among them are a litter of so-called Tiger cubs (managers who at one time worked for Tiger Management Corp. founder Julian Robertson Jr.). They include O. Andreas Halvorsen of Viking Global Investors, whose funds were down less than 1 percent; Chris Shumway of Shumway Capital Partners, down 8 percent; and Blue Ridge Capital’s John Griffin, down 8 to 9 percent.
Others with losses in the single digits: Israel Englander, whose Millennium Partners fund was down 3.3. percent; Moore Capital Management’s Louis Bacon, whose Global Investments fund fell 4.3 percent; Tudor Investment Corp.’s Paul Tudor Jones II, whose Tudor BVI Global Fund dropped less than 5 percent; Joseph DiMenna, whose Zweig-DiMenna International fund was off less than 6 percent; and Eric Mindich, whose Eton Park Overseas Fund was down 9.8 percent.
Most of these managers are long-short equity buffs who specialize in undervalued securities, a strategy that was not treated kindly by the markets in 2008. It is not uncommon for the Tiger cubs to perform similarly since they frequently invest in some of the same companies. At year-end Griffin, Halvorsen and Shumway (as well as Lone Pine Capital’s Stephen Mandel Jr., whose funds were down by double digits) all had Mastercard among their top ten holdings.
DiMenna and Mindich, for their part, seemingly like to make sector bets with exchange-traded funds. At the end of the fourth quarter, DiMenna’s two biggest holdings were Nasdaq 100 Trust Series 1, which mirrors the Nasdaq 100 index, and SPDR Trust Series 1, a tracking stock for the Standard & Poor’s 500 index.
