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The Great Hedge-Fund Mystery: Why Do They Make So Much? | The New Yorker

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Why do investors in hedge funds continue to allow the managers of the funds to dictate such onerous terms to them?

Save this story Save this story This is the time of year when publications that cover the hedge-fund industry do their annual rankings, and people get irate about the vast sums of money that the top hedgies make—in some cases, billions of dollars. At the top of this year’s list , according to a survey from Institutional Investor Alpha, are four familiar names: David Tepper, of Appaloosa Management, who made $3.5 billion; Stephen Cohen, of SAC Capital ($2.4 billion); John Paulson, of Paulson & Co. ($2.3 billion); and James Simons, of Renaissance Technologies ($2.2 billion). Questions can be rai

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