The average hedge fund fell by 5% in 2011 according to Forbes. But the managers we’re about to list do not run your average hedge fund. They were the ones who conquered 2011 dismal financial markets.
The median return for 2011’s top 10 managers was $500 million — Forbes did the rankings, now we’ll explain how they got there.
Firm: Caxton Associates
Good picks: United Rentals Inc., Sotheby's, S&P Put.
Why: Kovner's firm bought approximately 3 million shares in United Rentals in Q4, netting $91 million, according to Whale Wisdom. Another $31 million came from a fresh Q3 position in Sotheby's. A Q4 S&P put worth $125 million, according to Whale Wisdom, rocketed them into Forbes' top 10.
Returns: $210 million
Firm: Centaurus Advisors
Good picks: Pharmasset Inc,, Shanda Interactive Entertainment, Cephalon Inc.
Why: $161 million came from a call on Cephalon, according to Whale Wisdom, which Teva Pharmaceutical ended up purchasing in May. Gained $77 million in a call on Pharmasset Inc., Whale Wisdom notes, which was bought out by Gilead in November. The Q4 surge in Shanda Interactive Entertainment shares leading up to that firm's purchase in February yielded Arnold $31 million.
Returns: $360 million
Firm: Icahn Capital Management
Good bets: El Paso, Motorola Mobility
Why: Those two companies alone netted Icahn more than $1 billion, according to Whale Wisdom. El Paso shares doubled in 2011 to $26.57 after it was bought by Kinder Morgan; Motorola Mobility's purchase by Google caused its share price to surge 65%.
Returns: $2 billion