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The top 15 hedge fund managers made $23B in 2020

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The top 15 hedge fund managers made $23B in 2020

The year 2020 was one to forget, unless you were a billionaire hedge fund manager.

In the midst of record unemployment, spiraling coronavirus deaths and widespread social and political unrest, the top 15 hedge fund managers added a whopping $23.2 billion to their already extensive personal fortunes amid a stock market rally fueled by rock-bottom interest rates, according to data compiled by Bloomberg.

The biggest winner was Chase Coleman of Tiger Global Management, who hauled in a mind-boggling $3 billion, according to the Bloomberg Billionaires Index. 

Coleman, 45, rode large positions in COVID-friendly stocks like Zoom and Peloton to stellar returns of 48 percent for his investors, according to Bloomberg. While that resulted in substantial fees, the majority of his gains were from a personal stake in his fund, the news agency said.

Bloomberg noted that UK-based trader Michael Platt, who last year got caught on a viral video bragging to a New York City cabby about his wealth, made even more than Coleman at $5 billion. But he wasn’t included on the list of the 15 richest hedge fund managers because his Bluecrest Capital Management, which reportedly earned 95 percent last year, no longer manages money for outside investors.

Coming in second was former NSA codebreaker and MIT math professor Jim Simons, whose Renaissance Technologies pulled in $2.6 billion.

The windfall comes despite loses in three RenTech funds that have resulted in a reported $5 billion in investor redemptions since Dec. 1. RenTech’s flagship Medallion fund, which is mainly run on behalf of employees, returned 76 percent, however.

Simons, 82, announced in January that he stepped down from the chairman role at RenTech at the beginning of 2021.

Simons’ 2020 earnings were followed by Millennium’s Izzy Englander at $2.2 billion; Lone Pine’s Steven Mandel at $1.8 billion; Citadel’s Ken Griffin at $1.8 billion, Coutue’s Phillipe Laffont at $1.7 billion and Point72 founder-turned-New York Mets owner Steve Cohen, who pulled in about $1.7 billion for 2020.

No. 9 on the list was Bill Ackman, whose Pershing Square also posted the biggest return of the year at 83 percent, thanks in part to a short bet against the credit market in March that returned $2.6 billion when the pandemic cratered the economy. Ackman then bet on a number of stocks to rise as the market recovered.

Ackman, who launched a $4 billion blank-check company last year, pocketed $1.3 billion, Bloomberg said.

A couple of hedge fund managers who have since got caught on the wrong side of the “Reddit rally” also made out big last year, including Daniel Sundheim of D1 Partners, who raked in $1.1 billion; Andreas Halvorsen of Viking Global who made $923 million and Gabe Plotkin of Melvin Capital who earned a reported $846 million.

Their efforts to short stocks that had become a favorite of day traders, like GameStop, resulted in less profitable 2021, with January losses alone reported to be down 20 percent, 7 percent and 53 percent respectively.

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Markets pop as Fed chair Jerome Powell commits to low interest rates

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Markets pop as Fed chair Jerome Powell commits to low interest rates

Federal Reserve Chairman Jerome Powell reiterated plans to keep interest rates close to zero and asset purchases humming along despite signs that the US economy is beginning to recover from the pandemic.

After telling the Senate on Tuesday that he was concerned about inflation, Powell on Wednesday told the House Financial Services Committee he would keep the cheap money flowing until the Fed has made “substantial further progress” taming employment, something he predicted is “likely to take some time.”

The Dow Jones industrial average was recently up 290.26 points at 31,827.61 as investors cheered the prospect of easy money continuing to lift stocks even as it depresses demand for bonds.

Lawmakers from both parties pressed the nation’s chief monetary policymaker on whether the Fed needed to keep up its ultra-accommodative policies with jobs on the rise and bond yields finally showing some signs of life after both imploded in the first half of 2020.

Powell did agree with some House members that the country’s economic future has brightened. Still, he said unemployment remains troublingly high and that “there’s a lot of slack in the labor market” to get to the Fed’s goal of full employment.

The Fed chair declined to comment on President Biden’s $1.9 trillion bailout legislation, but said the package would have a negative impact on inflation.

Through two hours of questioning on Wednesday, House members — the same committee that ran the Reddit Rally hearing last week — had not asked Powell about the Fed’s actions on protecting the kind of retail investors who drove up the price of GameStop in January.

On Tuesday however, Powell did acknowledge to the Senate that he believed the excess liquidity being pumped into markets by the Fed had an impact on causing the Reddit Rally.

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GameStop stock jumps as finance boss leaves amid Reddit saga

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GameStop stock jumps as finance boss leaves amid Reddit saga

GameStop’s stock price surged Wednesday after the “Reddit rally” favorite hinted at efforts to supercharge its digital growth plans.

Shares in the Texas-based video game retailer climbed as much as 10 percent to an intraday peak of $49.57 after it announced that chief financial officer James Bell would leave on March 26 after less than two years in the job.

The company said it’s hired an executive search firm to help pick a successor who can “help accelerate GameStop’s transformation.”

The company has been seeking to shift its business from selling physical video game equipment to dealing in digital games as the industry moves online.  

GameStop did not explain why Bell was resigning except to say in a Tuesday regulatory filing that his departure was “not because of any disagreement with the company” or any issue with its operations, policies or practices.

Bell is slated to receive a roughly $30 million compensation package on his way out the door, including $2.8 million in severance and millions more in stock, according to Bloomberg News.

“The company thanks Mr. Bell for his significant contributions and leadership, including his efforts over the past year during the COVID-19 pandemic,” GameStop said in a press release.

The shakeup came less than a month after rookie investors on Reddit’s WallStreetBets forum pushed GameStop’s share price as high as $483 in a campaign to squeeze hedge funds that had bet against the stock.

The unprecedented market frenzy made GameStop synonymous with the populist uprising in the stock market that drew the attention of federal lawmakers and regulators. The company stayed quiet and reportedly decided against raising money by selling shares during the rally.

GameStop is pursuing a turnaround led in part by Chewy.com founder Ryan Cohen, who was named to the company’s board in January after buying a 13 percent stake.

Some investors — including Keith Gill, the retail trader known as “Roaring Kitty” who’s been credited with sparking the GameStop surge — think the retailer can reinvigorate itself by expanding its e-commerce business.

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Dave Portnoy grills Robinhood CEO Vlad Tenev over GameStop

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Dave Portnoy grills Robinhood CEO Vlad Tenev over GameStop

Congress is nothing compared to Davey Day Trader.

Barstool Sports founder Dave Portnoy put the screws to Robinhood CEO Vlad Tenev as he accused the stock-trading app of turning its back on amateur investors during the GameStop saga.

“You did something and gave a huge advantage to the big guy that is the exact opposite of helping the little guy,” Portnoy told Tenev during a Tuesday night livestream broadcast on Twitter. “You killed the little guy.”

Portnoy grilled Tenev about Robinhood’s decision last month to temporarily halt trading of “meme stocks” such as GameStop and AMC Entertainment that had been pumped up on Reddit’s WallStreetBets forum.

Portnoy — who’s made a name for himself as a foul-mouthed day-trading maven over the past year — previously claimed he lost about $700,000 on such stocks, which surged in late January before tanking earlier this month.

“Robinhood manipulated that stock price. You cratered it,” Portnoy told Tenev, referring to GameStop.

Fresh off his appearance before the House Financial Services Committee last week, Tenev stood by the decision, saying it helped Robinhood stave off a cash crunch at a time when it was already under heavy financial pressure.

The Silicon Valley startup probably would have let customers continue buying GameStop shares had a Wall Street clearinghouse not sent Robinhood a dead-of-night demand for a $3 billion deposit, Tenev said.

“If we had a bunch more headroom, yes, we probably would have let things continue,” Tenev told Portnoy.

“If we didn’t act, we very likely could have faced a liquidity issue in the future. So we had to act,” he later added. “And that’s why I said we had to act to protect the firm and our customers, because if the firm can’t — I mean, if the firm can’t continue to serve our customers, that’s a much worse situation.”

Portnoy had not been shy about his anger toward Robinhood leading up to the tête-à-tête. On Jan. 28, the day the app blocked trading on GameStop, he fired off a tweet threatening to “burn @RobinhoodApp to the ground.”

Portnoy was similarly confrontational Tuesday night. Before the interview started, he called Tenev a “rat and a liar,” then made Tenev watch a video that depicted him as a clown with a big red nose.

“You know everybody here who’s watching this hates your guts, right?” Portnoy said at the start of the broadcast.

“That’s what I hear,” replied Tenev, who was wearing a baseball cap with the words “Taco Tuesday” emblazoned on it.

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