Institutional Investor's Alpha Magazine - April 2008 - (Page 3)

Letter from the editor Earning Attention EDITOR Michael Carroll EXECUTIVE EDITOR Michael Peltz EDITOR Michael Carroll INTERNATIONAL EDITOR Tom Buerkle MANAGING EDITOR David Schutt U.S. EDITOR Jeffrey Kutler ART DIRECTOR Nathan Sinclair EDITOR-AT-LARGE Firth Calhoun ASSISTANT MANAGING EDITORS Peter Carbonara ART DIRECTOR Irene Ledwith (Money Management), Tom Johnson (Research), ASSISTANT MANAGING EDITORS Lewis Knox William Loob (Editorial Production), Sathya Rajavelu (Director, ResearchTechnologyGroup), (Research), Jeffrey Kutler (Global Operations and Tracy Tjaden (International) Banking), Deborah F. McClellan (Editorial BUREAU CHIEF Allen T. Cheng (Asia) Production), Barbara Rudolph (Money ManageSENIOR EDITORS Loch Adamson (London), ment) Steven Brull (Los Angeles), Karl Cates, EUROPEAN Kenney (Editorial Research), Jane B. EDITOR Tom Buerkle (London) Jo Wrighton (Paris) BUREAU CHIEF Kevin Hamlin (Hong Kong) SENIOR WRITERS Frances Denmark, SENIOR EDITORS Steven Brull (Los Angeles), Andrew Capon (London), Jane B. Kenney STAFF WRITERS Dan Freed, David Lanchner (Paris), (Editorial Research) Imogen Rose-Smith, Julie Segal SENIOR WRITERS Deepak Gopinath,Ewing SENIOR ASSOCIATE EDITOR Tucker Justin Michael Shari, Henry Teitelbaum Schack ASSOCIATE EDITORS Sivert Hagen, John Livingstone, WeiQing Lu Lanchner STAFF WRITERS Rich Blake, David (Research Specialist), Timothy Roberts (Research Specialist), (Paris) Carolynn B. Tetro SENIOR ASSOCIATE EDITOR COPY CHIEF David Wray Tucker Ewing ASSOCIATE EDITORS Emily Fleckner, Hawthorne, SENIOR CONTRIBUTING EDITORS Fran Sivert Harvey D. Shapiro, Stephen Taub Hagen Pam Abramowitz, Danielle Beurteaux, Phil Davis, SENIOR CONTRIBUTING EDITORS Fran Hawthorne, Udayan Gupta, Scott Martin, Neil O’Hara, Hal Lux, Harvey Scholl, Irwin Speizer Nick Rockel, JayeD. Shapiro, Charles Smith (Tokyo), Stephen Deputy Copy Chief: COPY DEPARTMENTTaub, Joan Warner Bill Christophersen; CONTRIBUTING EDITORS Colin Barraclough, Copy Editors: Ingrid Accardi, Ruth Hamel Lucy Conger (Mexico City), Jonathan Kandell, ASSISTANT TO THE EDITOR Elizabeth Simroe Lois Madison Reamy, Kazuhiko Shimizu ART DEPARTMENT Deputy Art Director: Diana Panﬁl; (Beijing), Leah Nathans Spiro Associate Art Director: Anthony Scerri; Senior Designer: Lee Deputy Copy COPY DEPARTMENT H.Wilson; Chief: Jeff CranAssociate: Sabrina Henley; Photo Editor: Daniella Nilva; mer Associate Photo Editor: Alden Gewirtz; ASSISTANT TO THE EDITOR Elizabeth Simroe Color Imaging Manager: John Miliczenko CONTRIBUTING WRITERS COPY CHIEF David Wray CHAIRMAN & CEO Gary Mueller ART DEPARTMENT Deputy Art Director: Patrizia Bove; GROUP PUBLISHER Christine Cavolina Associate Art Director: Stephanie Lora; Photo Editor: PUBLISHER Joy DeSanto Anastasia Pleasant; Color Imaging Manager: PUBLISHER, INTERNATIONAL Spencer Wicks John Miliczenko PUBLISHER, ASIA Wendy Gallagher ONLINE SALES DIRECTOR Chris DeAngelis PRESIDENT & CEO Christopher R. Brown EXECUTIVE DIRECTOR OF MARKETING PUBLISHER Christine Cavolina PRODUCTION DIRECTOR Brian Gill DIRECTOR OF FULFILLMENT Lisa Traeger PUBLISHER, INTERNATIONALRobert Tonchuk CHIEF OPERATING OFFICER David E. Antin PRODUCTION DIRECTOR Brian Gill Institutional Investor’s AlphaTM and Alpha,TM 225 Park Avenue South, New York, NY 10003; (212) 224-3300; Fax: (212)PRODUCTS MANAGING DIRECTOR OF RESEARCH 224-3171. Louis Cassetta JEFFREY IMMELT HAS A TOUGH JOB. As CEO of General Electric Co., Immelt oversees a global empire of more than 300,000 employees and answers to about 5 million shareholders. Millions more look to Immelt for insight into the health of the world economy because of the breadth of his company’s businesses. On April 11, he disappointed both groups when he reported that GE’s earnings for 2008 would grow by only 5 percent, half what he’d told investors just one month earlier. GE’s share price dropped 13 percent on the news, its biggest one-day percentage loss in more than 20 years. Immelt may want to consider joining a hedge fund. As our second annual Money Issue shows, hedge fund managers have been enjoying very positive earnings. So much so that we’ve expanded our ranking of the world’s highest-paid managers — in this, its seventh year — from 25 to 50 people. Altogether, the 50 on our list made a staggering $29 billion in 2007 — an average of $581 million each. That’s higher than the $532 million in average earnings our 25 best-paid managers made one year ago (this year’s top 25 averaged a record $892 million). In “The Kings of Cash” (page 34), Senior Contributing Editor Stephen Taub explains how they did it. Like Immelt’s GE, the top earners on our list are a diverse lot. John Paulson, who made $3.7 billion shorting subprime mortgages to lead our list, is a longtime merger arbitrageur. James Simons, who drops from No. 1 to No. 3 despite making $2.8 billion in 2007, is a prize-winning mathematician. George Soros, who edges out Simons with $2.9 billion in earnings, is a famed global macro investor who spends most of his time these days focused on charity and politics. Most hedge fund executives don’t earn billions. To ﬁnd out what they do make, turn to our Hedge Fund Compensation Report (page 59), in which we surveyed more than 800 hedge fund professionals at some 600 ﬁrms. As Staff Writer Imogen Rose-Smith chronicles in “Where the Money Is,” everyone from junior analysts to hedge fund CEOs saw their total pay packages rise from 2006 to 2007. So what are hedge fund managers doing with all their newfound wealth? Some, like Philip Falcone and Daniel Loeb, are sinking their money into pricey New York real estate. Others are using it to try to gain an investment edge (Paulson hired former Fed chairman Alan Greenspan as an adviser). But in what is an unusual departure for the traditionally secretive hedge fund industry, managers are now actively engaging in discussion with Washington, as Rose-Smith reports in “Into the Light” (page 64). Good thing, because given how much they earn, hedge fund managers make a tempting target for lawmakers looking to tighten regulations in response to the credit crisis. Denise Murrell © 2008 Institutional Investor, Inc. No statement in this magazine is to be construed as a recommendation to buy or sell securities. Neither this publicationOF FINANCE it may be reproduced or transmitted DIRECTOR nor any part of AND OPERATIONS in any form or by any means, electronic or mechanical, including David E. Antin photocopying, recording or by any information storage and retrieval system, without the prior written permission of Institutional Investor magazine. For reprints, Alpha Dewey Alpha,TM 225 Park AvInstitutional Investor’scontact TM and Palmieri (212) 224-3675; Fax: (212) 224-3563; e-mail: dpalmieri@iinvestor.com.(212) enue South, New York, NY 10003; (212) 224-3300; Fax: Subscription hotline (800) 437-9997; Overseas (44-20) 7779 8999 224-3171. MICHAEL PELTZ EXECUTIVE EDITOR mpeltz@iimagazine.com APRIL 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 3 FEBRUARY2008 • INSTITUTIONAL INVESTOR’S ALPHA • 00

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - April 2008

Institutional Investor's Alpha Magazine - April 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Here to Eternity The Good Guys: Voice of Hope Cover Story: The Kings of Cash Where the Money Is Into the Light Interview: Proceeding with Caution Strategies: A Convenient Truth Alpha Bytes: Village Voice Unhedged: Commentary: No Time for Complacency

Institutional Investor's Alpha Magazine - April 2008

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