what sets hedge fund managers apart from other types of fund managers is the fact that the personal worth and funds of hedge fund managers are usually tied directly to the fund itself 
the duties of a hedge fund manager involve top hedge fund managers hold some of the most well paid positions in any industry far outpacing ceos of major companies in fact some of the highest grossing managers make close to 4 billion a year 1this extraordinary compensation potential requires hedge fund managers to stay competitive to consistently create winning investment strategies and to make advantageous trade choices note that many hedge fund managers make much less than the top paid managers in some cases because their funds generate lower profits individuals wishing to invest in hedge funds must meet income and net worth requirements hedge funds can be considered high risk because they pursue aggressive investment strategies and are less regulated than many other types of investments hedge fund strategieshedge fund managers can use multiple strategies to maximize returns for their firms and clients 1 one popular strategy is using something called global macro investing the idea is to invest in tandem with a large share of sizable position in markets that are dealing with predicting global macroeconomic trends this type of strategy gives hedge fund managers the necessary flexibility they need but it is heavily dependent on excellent timing 2 another popular tactic that has made multiple hedge fund managers billionaires is an event driven strategy managers look for attractive opportunities to capitalize on a corporate environment examples of this include mergers and acquisitions bankruptcies and shareholder buyback initiatives managers using this strategy seek to capitalize on any market inconsistencies it s similar to using a value investing approach hedge fund managers often go this route because of the vast resources they have behind them according to an analysis by veteran business to business publisher institutional investor despite the tough year for the markets 2022 was a very good year for multistrategy macro trend following and fixed income hedge fund managers 1hedge fund manager compensationtwo and twenty or 2 and 20 is a typical fee arrangement for hedge fund managers that is standard in the hedge fund industry it is also common in venture capital and private equity hedge fund management companies typically charge clients both a management and a performance fee two means 2 of assets under management aum and refers to the annual management fee charged by the hedge fund for managing assets twenty refers to the standard performance or incentive fee of 20 of the profits made by the fund above a certain predefined benchmark while this lucrative fee arrangement has resulted in many hedge fund managers becoming extremely wealthy in recent years the fee structure has come under fire from investors and politicians for varying reasons some hedge fund managers also have to contend with a high watermark that is applicable to their performance fee a high watermark policy specifies that the fund manager will only be paid a percentage of the profits if the fund s net value exceeds its previous highest value this precludes the fund manager being paid large sums for poor performance and ensures that any losses must be made up before performance fees are paid out in 2022 the 25 highest paid hedge fund managers made 21 5 billion an average of approximately 860 million for each the hedge fund manager who earned the most ken griffin banked 4 1 billion 1the median amount earned by hedge fund managers in 2022 was 570 million 1