Greenwich's Outrageous Fortunes and the Children's Investment Fund

by: Whitney Tilson

Whitney TilsonFrom Whitney Tilson: It's quite remarkable how much money is being made in Greenwich -- and in the hedge fund world in general. I wish there were more evidence that the folks making such extreme amounts of money were giving away equally extreme amounts of money -- on things that really make a difference in the world -- rather than pissing it away in a narcissistic orgy of ridiculous houses and the like. Only somewhat better is the all-too-common lame philanthropy, which I define as giving money to institutions that are already filthy rich in return for increased social standing, having a building named after you, etc. Pardon me while I puke!

...within the enclosed, narrow world of hedge funds, colossal amounts of money are being made by thousands of seemingly ordinary and unknown people, too—many of whom are spending unsettling amounts on new houses. As one Greenwich real-estate broker told me with obvious delight, "Some of the hedge-fund guys spend $5 million, $6 million, $7 million, $8 million without batting an eye." Some spend far more.

The above is not to criticize all hedge fund managers. I know many that are enormously generous and are doing/funding very innovative, high-impact things. At the top of this list is Chris Hohn, who when he left Perry Capital to start his own fund (based in London), named it the Children's Investment Fund and set up a foundation (www.ciff.org) that receives 50 basis points of his management fee (plus another 50 basis points if the investors' net return exceeds 11% in a year). In effect, it's a 2% management fee (1% to the fund and 1% to the foundation).

Given his phenomenal returns and multi-billion pool of capital, you can imagine the kind of money that's going to help impoverished children in developing countries around the world. Kudos!

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