Top hedge fund managers made US$15.8B in 2021 amid volatility
BNN Bloomberg
One little-known hedge fund manager made an estimated US$2 billion in 2021, mostly thanks to an 11-year-old wager on Avis Budget Group, a bet that paid off handsomely as the stock soared 456%
Karthik Sarma outearned Steve Cohen last year.
The little-known hedge fund manager made an estimated US$2 billion in 2021, mostly thanks to an 11-year-old wager on Avis Budget Group Inc., a bet that paid off handsomely as the stock soared 456 per cent.
Sarma, it’s safe to say, isn’t your stereotypical, fleece-vested Manhattan hedge fund manager. When the pandemic struck, he didn’t flee to the Hamptons, Palm Beach or Aspen like many other Wall Street elites. Instead, he moved in with his sister and her family, living in their modest home in a middle-class New Jersey suburb, where the houses sit side by side -- and there’s only room for two cars in the driveway.
Sarma, 47, runs his firm differently, too. At SRS Investment Management, he avoids the hefty leverage many other funds embrace, and runs a much more robust short book. Moreover, he isn’t afraid to go big on a single investment — and hang on for as long as it takes.
That helps explain how Sarma appeared near the very top of Bloomberg’s 2021 ranking of hedge fund earners, only slightly outdone by Citadel’s Ken Griffin and TCI Fund Management’s Chris Hohn. SRS owns about 50 per cent of Avis through common stock and swaps, helping to roughly triple Sarma’s net worth to US$3 billion, according to an analysis by the Bloomberg Billionaires Index, and rewarding investors in his flagship fund with a 35 per cent gain.
It’s an impressive feat, given that those firms each run more than US$40 billion, compared with US$8 billion for SRS.
