Editor’s Letter – Issue 150

September 2020

Hamlin Lovell
Originally published in the August | September 2020 issue

LCH Investments’ annual ranking of the most profitable 20 hedge fund managers is most famous for estimating the profits they have made for their investors. But the report also highlights that the top 20 have distributed over $62.5 billion to philanthropy and charity, and that this makes up around 45% of the performance fees they have earned since inception, as of the end of 2019. Some managers want to go further than this, and have signed The Giving Pledge, whereby they – and often also their spouses and families – commit to give away the majority of their wealth, either in their lifetimes or after. 

The United States has a tradition of competitive philanthropy that is clearly evident in managers’ public bequests.

We have identified fifteen current or former hedge fund managers who have made this pledge:

  • Pershing Square founder Bill Ackman
  • Centaurus founder John Arnold and his wife Laura
  • Omega Advisors founder Lee Cooperman and his wife Toby
  • Bridgewater founder Ray Dalio and his wife Barbara
  • Stanley F. Druckenmiller, who runs the Duquesne family office
  • Gabelli Associates founder Mario Gabelli and his wife Regina
  • Winton founder David Harding and his wife Claudia
  • TCI founder Christopher Hohn
  • Icahn Enterprises founder Carl Icahn
  • Baupost founder Seth Klarman and his wife Beth
  • Tiger founder Julian Robertson
  • Elliott Associates founder Paul E. Singer
  • Farallon founder Tom Steyer and his wife Kat Taylor
  • AKO founder Nicolai Tangen and his wife Katja
  • Paul Tudor Jones and his wife Sonia

It is perhaps no accident that only three of these – David Harding, Christopher Hohn and Nicolai Tangen – are in Europe. Some hedge fund managers in Europe are utterly reticent about any corporate and personal philanthrophy, and of course it is their prerogative as private individuals to remain private in this regard.

This may partly reflect cultural differences. The United States has a tradition of competitive philanthropy that is clearly evident in managers’ public bequests. Many US hedge fund managers have foundations that disclose public tax returns, revealing where they have invested capital and where they have donated it. For instance, Ray Dalio’s foundation has invested in some ESG equity funds.

Many donations have been made to science, medicine, the arts and managers’ alma mater universities. Some managers have also for some years been promoting environmental goals, such as Paul Tudor Jones’ investments in conservation.

In light of 2020’s Black Lives Matters protests, it is worth examining a recent initiative designed to promote racial equality. Macro fund, Rokos Capital Management, is seeking to support educational opportunities for people of African, Caribbean and other minority descent. One of its projects will provide teachers and specialist teaching assistants to a London school in Haringey, while another will work with The Amos Bursary to provide mentoring and financial support for students aged between 16 and leaving university.

It is refreshing to see a European manager following in the footsteps of the many US hedge fund managers, who have for decades been pursuing somewhat similar projects, such as supporting charter schools that are often serving disadvantaged minority groups.