Last week news emerged that as a result of the deteriorating local economy, coupled with a plunge in hedge fund profits, the capital of Connecticut – Hartford – was preparing for bankruptcy. Among the reasons cited by Department of Revenue Services Commissioner Kevin Sullivan was that wealthy people are ‘dramatically less wealthy than they were before.’
It turns out that, at least relatively speaking, he was correct.
According to the latest annual ranking by Institutional Investor’s Alpha magazine, the woes that have plagued hedge fund LPs who have paid 2 and 20 (or 1 and 10 as the case may ) for seven consecutive years of market underperformance have finally spread to management and in 2016 the 25 top paid hedge fund managers made a combined $11 billion. Although that sounds like a lot, it’s actually the lowest total since 2005, when the top 25 earned just $9.4 billion. It’s also just a little over half of what the top 25 managers earned just three years ago, when they reaped a total of $21.2 billion.
The average top earner made $440 million in 2016. The median earner made $250 million, the lowest since 2011, when the median earner made $235 million.
This post was published at Zero Hedge on May 16, 2017.