As hedge fund returns have been lackluster over the past several years, something interesting has been occurring on the Forbes 400 list of the wealthiest US residents. Investment fund managers have been falling by the wayside. There are currently 22% less investment fund managers on the list, Forbes columnist Nathan Vardi noted, and they have been replaced by the likes of “a fish stick king, meat processor, vodka distiller, ice tea brewer and hair care products peddler.” With such a list of oddballs displacing the once-vaunted hedge fund manager, what is the world coming to?
The problem is not so much that the Investment fund managers have been losing their personal money, but they just haven’t been keeping up with other billionaires who own stock in their companies as the markets surge.
Louis Bacon of Moore Capital Management, for instance, fell off the list with only $1.7 billion on net worth, just missing the cut-off at $2 billion. Likewise, James Dinan of York Capital, who also owns a stake in the Milwaukee Bucks basketball team, dropped off the list with only $1.9 billion in net worth.
Bacon and Dinan were “too poor” to make the top 400 list, but they are in good company, joining 169 billionaires who likewise didn’t make the cut. Facebook Chief Operating Officer Sheryl Sandberg, worth $1.6 billion, missed the cut, as did activist investor Nelson Peltz, founder of Trian Partners, who came up short with just $1.7 billion of net worth.
The average net worth of those on the list this year was $6.7 billion, up near 11% from the previous year.
Overall there are 22 newcomers to the list which is decidedly devoid of hedge fund names. The wealthiest of the newcomers is Rocco Commisso, with $4.5 billion, is the founder of Mediacom, a little-known cable TV and broadband operator. He is one of three immigrants to debut on the list, Forbes noted. College dropouts David Zalik, a fintech executive with $2 billion, and Ben Ashkenazy, a real estate tycoon worth $4 billion, dot the list along with the youngest newcomer, Rishi Shah, worth $3.6 billion, who is the founder of Outcome Health.
The sole hedge fund manager to appear for the first time on the list is not a new name on Wall Street. Cliff Asness, known as “Mr. Momentum” and founder of quantitative investment firm AQR Capital Management, makes his debut on the list with $3 billion in net worth.
Legendary investor Warren Buffett represented the financial services industry in the top five, clocking in at number three with $78 billion in net worth. George Soros, at $23 billion, was the second highest fund manager, ranking at #20, a distinction that might escape him next year as he recently donated $16 billion of his fortune to his charity.
Systematic macro investor Ray Dalio, with $17 billion net worth, came in at #26, just ahead of activist Carl Icahn, whose $16.7 billion but him at #27.
Investment fund managers who have been having challenges nonetheless made the list, including Bill Gross, whose performance since he left PIMCO has been less than outstanding, clocks in at #324 and a $2.5 billion net worth. Larry Robbins, whose healthcare bets proved troublesome in 2015, is on the list at #350 and a $2.3 billion net worth.
Chase Coleman III, who clocked in at #369 with $2.2 billion in net worth, has been known to sprinkle investments around in the Internet and fintech startups.
Forbes pointed out that of the 10 wealthiest hedge fund managers, only Ken Griffin of Citadel, worth $8.5 billion and Israel Englander of Millennium Management, worth $5.2 billion, are “running thriving hedge fund businesses that seemed poised for future growth and expanded operations.”
RIP hedge fund giants and welcome your new fish king overloads