The mutual fund trading scandal certainly hasn't slowed down hedge fund manager Israel "Izzy" Englander.
The Millennium Partners founder made $230 million last year, making him the 11th most profitable hedge fund manager, according to
Institutional Investor's Alpha
magazine's annual ranking of the top 25 managers.
Englander's big payday came even as he and his hedge fund paid out a total of $180 million in fines and restitution to settle allegations that Millennium engaged in abusive mutual fund trading. The storied arbitrager and onetime partner of Boesky-era trading legend John Mulheren personally paid $30 million in civil penalties as part of the deal with New York Attorney General Eliot Spitzer and the
Securities and Exchange Commission
Spitzer's office, in settling with Millennium, filed a lengthy complaint that painted an unflattering picture of the fund and Englander. At the time, people close to Spitzer's office thought the gory details of Millennium's abusive trading tactics might scare away some skittish investors.
But that does not appear to have happened. Millennium currently has a little over $5.3 billion in assets, about $2 billion more than it had when the trading scandal first broke in the fall of 2003. A big reason investors have stuck with Englander is that he has posted solid returns. Last year the fund was up 13.5%, according to
Yet as hefty as Englander's payday was in 2005, it looks puny compared with the $1.5 billion taken home by James Simons, the head of the Renaissance Technologies hedge fund complex. His flagship $5.3 billion Medallion hedge fund was up 29.5% last year.
Then again, given the lucrative fee structure at Medallion, it's easy to understand how Simons did so well. Medallion charges a 5% management fee to all investors and a 44% performance fee, which is based on the profits the fund makes.
It's standard for hedge fund managers to charge a 2% management fee and a 20% performance fee.
Simons, according to
, just beat out the list's second-ranked manager, famous wheeler-dealer oilman T. Boone Pickens Jr. His BP Capital Management hedge fund made him $1.4 billion in 2005.
Rounding out the top 10 earners were George Soros, with $840 million; SAC Capital's Steven Cohen, with $550 million; Tudor Investment's Paul Tudor Jones, with $500 million; ESL Investment's Edward Lampert, with $425 million; Caxton Associate's Bruce Kovner, with $400 million; DE Shaw's David Shaw, with $340 million; and Lone Pine Capital's Stephen Mandel Jr., with $275 million.
New to the top 25 is Timothy Barakett, one of the founders of Atticus Management, a $12 billion hedge fund that's been an
active player in the global stock exchange consolidation game. Barakett, whose fund complex was up a little over 20% last year, took home $200 million.
Atticus has taken a starring role in the complicated merger dance going on between the
New York Stock Exchange
, Germany's Deutsche Boerse and Euronext. Atticus owns considerable equity stakes in all three exchanges and has made a lot of money this year on the big run-up in exchange stocks.