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Top hedge fund managers still raking in the money

Despite market turmoil, top 25 earners took home $11.6 billion in 2008, according to ranking by Alpha magazine.

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By CNNMoney.com staff

LONDON (CNNMoney.com) -- Despite turbulence in the financial markets and the global economic downturn, the world's 25 top-earning hedge fund managers raked in a staggering $11.6 billion last year, according to a ranking released Wednesday.

On average, the managers took home $464 million each, Alpha magazine's annual list of top hedge fund earners showed. By comparison, the average take home pay in 2007 was a whopping $892 million.

Leading the pack was James Simons of New York's Renaissance Technologies, who took home $2.5 billion in 2008. He was followed by John Paulson, who held the No. 1 spot in 2007. Paulson earned $2 billion last year.

In the No. 3 spot was John Arnold, founder of Centaurus Energy, who earned the bulk of his $1.5 billion through natural gas trading, according to Alpha. George Soros, who raked in $1.1 billion, and Raymond Dalio of Bridgewater Associates came in fourth and fifth, respectively.

Hedge funds are private investment funds that are targeted mainly at wealthy individuals and large institutions. They use a variety of investment methods, ranging from bets on currencies and mergers to traditional stockpicking.

The industry has come under scrutiny in recent years, however, for its secretive nature and for a particular strategy some funds employ known as short selling, or betting against a company.

Alpha compiles its list by measuring the share of the performance and management fees the managers receive and the gains they reap from their own investment in their funds. To top of page

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