Institutional Investor's Alpha Magazine - April 2008 - (Page 37)

James Dinan 12 PHOTO BY DANIEL ACKER/BLOOMBERG NEWS Fund fell by 0.2 percent and investors yanked $4 billion from the now–$22 billion fund. It was a rare setback for one of the greatest money managers of all time. But anyone wondering whether Simons, 70, is losing his touch need look no further than Renaissance Technologies’ ﬂagship Medallion Fund, which was up 73 percent in 2007 — after its fat 5 percent management fee and 44 percent performance fee — and has racked up an almost 40 percent annualized return since its 1988 launch. Little is known about how Simons, an award-winning mathematician, makes his money, but he likes to say he trades anything anytime and everything everywhere. Renaissance, which is based in East Setauket, New York, had $57 billion in heavily leveraged equities at the end of 2007. Although its computers trade rapidly in and out of positions, the institutional fund was hurt by the subprime crisis. 4 arb shop Gruss Partners as a general partner. Six years later he struck out on his own. Success like the kind he had in 2007 buys a lot, including access to former Federal Reserve Board chairman Alan Greenspan, who is now a Paulson adviser. And Paulson is spending some of his winnings. He recently listed his three-acre Hamptons estate for $19.5 million, twice what he paid for it two years ago, and he is moving up to a $41.3 million 10.4-acre spread in the same neighborhood. and $3 billion at the end of 2006. In January, Soros tapped BlackRock cofounder Keith Anderson as his chief investment ofﬁcer. Anderson succeeds Soros’ son Robert, becoming the fourth person in eight years to hold the job. The widely quoted Soros made headlines in January by calling the growing credit crisis “the bust that follows the housing boom” and saying, “It’s basically the end of a 60-year period of continuing credit expansion.” On April 9 he predicted that global subprime losses would exceed $1 trillion. The 77-year-old Hungarianborn American, known as much for his politics as his wealth, is a vocal critic of the Bush administration and a supporter of the Democratic Party. Through his Open Society Institute, he promotes developing democracies and human rights. Philip Falcone Harbinger Capital Partners $1.7 BILLION 2 George Soros Soros Fund Management $2.9 BILLION Be afraid, Republicans, be very afraid: George Soros has more money than ever. Soros’ $17 billion ﬂagship Quantum Endowment fund racked up a 31.7 percent return in 2007, its best annual showing since the high-tech implosion at the start of this decade. Soros’ $2.9 billion payday comes almost entirely from his personal stake in the fund (which he no longer manages). At year’s end the New York–based fund had about $2.3 billion in equities, down from $2.9 billion the previous quarter 3 James Simons Renaissance Technologies Corp. $2.8 BILLION Jim Simons had his ﬁrst known brush with investment humility last year when his Renaissance Institutional Equities When Philip Falcone lost his job in 2000 as head of high-yield-debt trading for Barclays Capital in New York after the British bank decided to shut down his group, he did what many Wall Streeters did: He started a hedge fund. In June 2001, with $25 million in seed capital from the Harbert family of Birmingham, Alabama, Falcone launched Harbinger Capital Partners. For his ﬁrst ﬁve years there, the senior managing director of New York–based Harbinger toiled in relative obscurity. But thanks to his decision in early 2007 to short subprime mortgages, he is obscure no more. In 2007, Harbinger’s ﬂagship fund returned 117 percent and did so with scant leverage, a rare one-two punch that brings Falcone to his debut near the top of Alpha’s list of highest earners. The 45-year-old Falcone, a former hockey star at Harvard University, oversees one of the world’s biggest pools of hedge fund assets, with $18 billion. Lately he is known for proxy ﬁghts and bankruptcy stalkings. This year he got two directors named to the New York Times Co. board; he APRIL 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 37

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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