A hedge fund is an investment fund that pools capital from accredited investors or institutional investors and invests in a variety of assets, often with complicated portfolio-construction and risk management techniques. To launch such a fund its founders have to collect a large amount of money which is later invested and managed by them. It’s not a secret that those hedge fund founders and managers earn massive profits if they perform well. An annual income of over $1 billion may sound incredible but it is not . Of course, well paid hedge fund managers always try to increase their assets, sometimes by investing back into the funds, sometimes through their own personal single family offices. As part of the research for our high quality database of single family offices in the U.S., we identified some family offices that are related to famous hedge fund billionaires. In the following article we want to introduce you five of the richest hedge fund managers and provide information about their (future) family offices.
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#1: Jim Simons, $21.6BN Estimated Net Worth, New York
Jim Simons is a mathematician and billionaire hedge fund manager. He is known as a quantitative investor and in 1982 founded Renaissance Technologies, a private hedge fund based in New York. Due to the success of Renaissance, Simons has been described as the greatest investor on Wall Street. His single family office “Euclidean Capital”, which is also part of our database of single family offices in New York, is also located in New York and focuses mainly on venture capital and real estate investments. Last year, we reported about an investment made by his office: Peltarion, a Swedish AI-startup whose technology enables companies to use Artificial Intelligence. Another current investment, made this month, is “Codagenix”. The firm employs a proprietary technology platform for the construction of live attenuated viral vaccines for multiple targets.
#2: John Paulson, $4.2BN Estimated Net Worth, New York
John Paulson leads Paulson & Co., a New York-based investment management firm he founded in 1994. He has been called “one of the most prominent names in high finance” and “a man who made one of the biggest fortunes in Wall Street history. Paulson began his career at Boston Consulting Group in 1980 where he did research, providing advice to companies. Ambitious to work in investment on Wall Street, he left to join Odyssey Partners. In 1994, he founded his own hedge fund, Paulson & Co., with $2 million and one employee. By 2019, his fund had grown to $8.7 billion in assets. So far, Paulson does not operate a family office yet but there a various news suggesting that he plans to convert his hedge fund into a family office.
#3: Ray Dalio, $18.7BN Estimated Net Worth, Westport
Raymond Dalio is the founder, co-chairman and co-chief investment officer of investment firm Bridgewater Associates, one of the world’s largest hedge funds. Bloomberg ranked him as the world’s 58th-wealthiest person in June 2019. Dalio began his career working on the floor of the New York Stock Exchange and traded commodity futures. He later worked as the Director of Commodities at Dominick & Dominick. In 1974 he became a futures trader and broker at Shearson Hayden Stone. In 1975 he founded investment management firm Bridgewater Associates out of his apartment. His single family office “Dalio Family Office” operates highly secret, but it’s known that it focuses at real estate investments. Last year, Dalio hired Bruce Zimmerman as the new Chief Investment Officer for his family office. Zimmerman had led the $46.1 billion University of Texas Investment Management Co. (UTIMCO) for nearly a decade before.
#4: Steve Cohen, $13.6BN Estimated Net Worth, Stamford
Steven A. Cohen is the founder of Point72 Asset Management and now closed hedge fund S.A.C. Capital Advisors, both based in Stamford, Connecticut. In 1978, after graduating from Wharton, Cohen got a Wall Street job as a junior trader in the options arbitrage department at Gruntal & Co. He went on and made the company earning around $100,000 a day, later managing a $75 million portfolio and six traders. In 1992, Cohen started S.A.C. Capital Advisors with $10 million of his own money, and another $10 million from outside capital. The company’s name ‘SAC Capital’ derived from Steven A. Cohen’s initials. In 2016 he closed the hedge fund and turned it into a multi family office “Point72”, which invests across a range of industry sectors and geographies, and throughout the lifecycle of a company. His personal single family office is called “Cohen Private Ventures” and is located in Stamford. Cohen Private Ventures’ primary investment strategies include: direct private equity, growth equity and venture capital, structured securities and specialized credit investments, real estate and other asset-based investments, and special situations and rescue financings. In 2018, Cohen’s single family office invested in “Autonomous Partners”, an investment fund focused on cryptocurrencies and digital assets.
#5: David Tepper, $12BN Estimated Net Worth, Miami Beach
David Tepper is the owner of the Carolina Panthers of the National Football League and also the founder and president of Appaloosa Management, a global hedge fund based in Miami Beach, Florida. Tepper started his career in the treasury department of Republic Steel in Ohio. In 1985, Tepper was recruited by Goldman Sachs as a credit analyst and became head trader after only six months. In December 1992, after being passed over for partner at Goldman Sachs twice in two years, Tepper quit. He created Appaloosa Management in early 1993, aggressively trading his personal account. Today his hedge fund has approximately $13 billion assets under management. As John Paulson, David Tepper does not run a single family office yet because until now, he managed his fortune through the hedge fund. But just as John Paulson, he also announced to convert his hedge fund into a single family office in the near future.
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