A new U.S. survey shows even with stock market volatility on Wall Street last year, top hedge fund managers were paid huge sums to handle the investments of the country's wealthiest people.
Institutional Investor's Alpha magazine said its annual look at the earnings of the leading hedge fund managers showed the 25 best-paid collectively took home nearly $13 billion in income.
Hedge funds pool money from investors, mostly capital from wealthy individuals and institutions, such as pension funds, and then invest in a variety of assets.
Hedge fund investors can sometimes reap large returns on their investments, if the hedge fund managers make savvy choices. But the opposite is also true, with bad investment decisions leading to huge losses.
The top two fund managers were Kenneth Griffin of the Citadel firm and James Simons of Renaissance Technologies, both of whom earned $1.7 billion in 2015.
Soros Fund Management chairman George Soros, left, shakes hands with Renaissance Technologies President James Simons on Capitol Hill in Washington, Thursday, Nov. 13, 2008, prior to testifying before the House Oversight and Government Reform Committee hearing on "Hedge Funds and the Financial Market".
Last year was particularly volatile on major U.S. and world markets. The benchmark Dow Jones Industrial Average of 30 key U.S. stocks lost 2.23 percent, although with the reinvestment of stock dividends held by investors, the index barely edged ahead by .19 percent.
As a result, some U.S. hedge funds lost billions of dollars for their investors in 2015, while others went bankrupt or shut down.
But the successful hedge funds did well, with two of Citadel's flagship funds advancing 14.3 percent, while the main Renaissance funds gained between 15.6 percent and 16.5 percent.
The hedge fund industry in the United States now manages $2.9 trillion in investments, a marked increase from the $539 billion figure in 2001.