Keep Up the Intensity

Curtis_ThumbFor fun, Curtis Macnguyen likes to run along the seafloor in 15 feet of water, carrying a boulder. He does it offshore from his house on the blue-watered Kona Coast of Hawaii’s Big Island, not far from similar spreads owned by Michael Dell and buyout kingpin George Roberts. Macnguyen, 46, is a hedge fund manager. An old-school hedge fund manager. His methods are what you’d expect from a guy who carries rocks underwater: lots of hard work, almost no big sprints, and steady progress, all under pressure.

No Photos, Please

ChaseIt’s hard to hide if you’re a hedge-fund billionaire in this gilded age. You get ranked by your returns, stalked by paparazzi and, if you end up in a nasty divorce, worked over by the New York Post. But search for a photo of some of the biggest names in the business, and you’ll find almost nothing.

Smart People, Dumb Things

HF_2014_ThumbBrett Jefferson told his 5-year-old son this about Wall Street recently: “Never will you find a place where so many smart people do so many stupid things.” That’s a good thing for Jefferson, 49. He’s been profiting from bankers’ blunders for more than a decade. His hedge-fund, Hildene Capital Management, vacuums up complex securities when others are shunning them as toxic junk. He makes money when the panic subsides and animal spirits return.

Meditate and Grow Rich

Meditation_CaptureWhen the markets took a dive in late January, hedge-fund manager David Ford kept his cool. As prices dropped, he overcame the impulse to flee with the rest of the herd and, instead, bought more bonds. Ford credits his serenity to experience — and to the 20 minutes he spends in his pajamas each morning repeating a meaningless mantra bestowed on him by a teacher of Transcendental Meditation two years ago.

Eat, Pray, Pump Iron

Diniz_ThumbnailAbilio Diniz can run backward. On a treadmill. In the dark. At age 77. Don’t hate Abilio Diniz. He wants you to do all the things he can do when you, too, are pushing 80: box, play squash, pump iron, even procreate: He has a 7-year-old daughter and a 3-year-old son with his second wife, Geyze, who’s 41–younger than all four children from his first marriage.

Robbins Earns 84% in a Year and Ice Skates in his Backyard

Robbins_ThumbnailWhen Larry Robbins was a boy in the Chicago suburbs, his father, Sheldon, worked two jobs and wasn’t around much. If the young Robbins wanted to see him on weekends, he had to travel to Arlington Park, a nearby horse-racing track that his dad ran. During those visits, his father taught him how to handicap horses. One lesson: Know the horse–and the race. Was the track dry or muddy? Did the horse win because he was fast or because the competition was lousy? The lesson stuck with him. By handicapping stocks the same way, he reaped an 84.2 percent gain in his $1.8 billion Glenview Capital Opportunity Fund, making it No. 1 in the annual Bloomberg Markets ranking of the best-performing large hedge funds.

Mark Rachesky Is Doctor Deal

Rachesky_ThumbMark Rachesky, a Stanford University M.D. who’s never practiced, worked for deal junkie Carl Icahn for six years. Then he left to start his own company: MHR Fund Management LLC. Master and apprentice met again in 2008, when Icahn, a relentless corporate raider, built a 9.2 percent stake in Lions Gate, where Rachesky already had a stake. Game on.

Whale Slayer Looks for Next Kill

BlueMountain_ThumbAndrew Feldstein, the Harvard-educated lawyer who leads BlueMountain Capital Management LLC, has had a good run. His firm boasts just one losing year since it started in 2003. Assets have swelled to $12.7 billion, and he has 150 people in New York and London helping him manage the abstruse derivatives contracts he likes to trade: credit-default swaps, collateralized debt obligations, synthetic CDOs, mortgage bonds, swaptions — the alphabet soup of stuff that went bad in 2008. Now, he’s picking through the wreckage for deals.

Wall Street Numerology

DeMark_ThumbPast the two Bentleys in the driveway and beyond the pool and mini water park, the home theater and a sports bar hung with enough memorabilia to equip a basketball team, Tom DeMark has his office — a dark, wood- paneled lair with six computer screens.

Merritt Paulson’s Soccer Match

imagesFormer U.S. Treasury Secretary and multimillionaire Henry Paulson spent much of his last year in office trying to save global capitalism. His son, Merritt, spent much of the last year trying to bring Major League Soccer to Portland, Oregon. His job seemed much easier — until last month.

Sean Healey, His Hedge Funds, and the Million-Dollar Fish

Healy_ThumbOne thing Sean Healey missed most when he left Goldman Sachs Group in 1995 was his business card. Flashing it was a surefire way to convince people of his credentials. “People would say, ‘Oh, you must be a genius,’ ” Healey jokes. Then he moved to Boston to work for a three-person startup with a bland name and a big idea. Affiliated Managers Group Inc. set out to buy stakes in equities money-management companies, including hedge funds, and share their investment fees. In return, the owners got cash for the companies they had built.

Steve Cohen Can Play Golf, Too

Cohen_ThumbIn late January, billionaire Steven A. Cohen hosted a golf outing for two dozen people at the Bear Lakes Country Club in West Palm Beach, Florida. Most of his guests were investors in his hedge fund firm, SAC Capital Advisors LP, plus a few prospects. The party played the Lakes Course—so named because 12 holes out of 18 have a water hazard—as 30-mile-per-hour gusts blew off the Atlantic Ocean.

Wasserstein’s Ghost

Wasserstein_ThumbBruce Wasserstein, dead for two years, still casts a pall over the Rogue River Valley of southern Oregon.

Falcone Blasts Money Into Space

Falcone_ThumbPhilip Falcone left his hometown of Chisholm in northern Minnesota’s rusting Iron Range in 1980 in the passenger seat of a 12-year-old Mercury Cougar that cost $150. He became one of the richest men in New York. Then he dabbled in satellites.

Fairfax and the Hedge Funds

Spyro_ThumbOne morning in 2005, an unusual letter arrived for Rev. Barry Parker at St. Paul’s Anglican church in Toronto. The news: A member of his flock was out to swindle the parish. From there, the story got interesting.

Duff Capital’s Bender Ends Badly

Duff_ThumbPhil Duff had a three-decade hot streak. He earned degrees from Harvard University and MIT and then skipped through the ranks at investment bank Morgan Stanley, becoming chief financial officer in 1994, when he was 36. Hedge fund phenom Julian Robertson hired him four years later as chief operating officer at Tiger Management LLC.

Mortgage Metaphysics

SPM_ThumbFor 20 years, Don Brownstein taught philosophy at the University of Kansas. He specialized in metaphysics, which examines the character of reality itself. In a photo from his teaching days, he looks like a young Karl Marx, with a bushy black beard and unruly hair.

Chase Coleman Makes a Killing

Chase_ThumbCharles Payson Coleman III, known as Chase, is as close as one gets to American aristocracy. He is the heir to a fortune, and he’s made his own.

Andy Beal, Texas Banker

Beal_ThumbAndy Beal’s road to becoming a billionaire, doing deals with the likes of Carl Icahn and Donald Trump, runs straight through the slums of Newark, New Jersey.

Citigroup, Unhedged

PanditVikram Pandit knows one way to make big money in hedge funds: sell them. In July 2007, Pandit sold Old Lane Partners LP to Citigroup Inc. for $800 million and pocketed $165 million for his stake. Then he took over the bank’s in-house hedge-fund group. He became chief executive officer of the whole company just five months later. For Pandit, the hedge-fund business was a sprint to riches. For Citigroup, it’s been a slog.

Alice Handy 1, Harvard 0

Handy_PDFPrescient bets against the stock market have helped endowment manager Alice Handy regularly beat the Standard & Poor’s 500 Index. Handy, who manages money for Smith, Barnard and Middlebury colleges at a firm she founded called Investure LLC, has also done something more satisfying: vanquish Harvard and Yale.

Bob Sillerman, Wall Street Idol

Sillerman_ThumbMedia baron Robert F.X. Sillerman had a great run until he tried to break into real estate with Elvis Presley.

The World’s Pain Is Paulson’s Gain

Paulson_ThumbThe subprime crisis that’s caused so much trauma for hedge funds and investment banks has brought only good news for John Paulson. He’s the manager of more than $7 billion in hedge fund money keyed to mortgage credit. Paulson started warning his investors back in the middle of 2006 that the frenzy to build and sell housing was a bubble about to pop. His New York–based firm, Paulson & Co., made big bets predicting the edifice would soon come crashing down. The wager paid off in the first nine months of 2007, when Paulson’s Credit Opportunities funds rose an average of 340 percent.

Pirate Tom

PirateTom Hudson and his pirates had a blunt message for Canadian ski-resort owner Intrawest Corp.: “Surrender the Booty.” It was March 2006, and Hudson, who runs a hedge fund firm called Pirate Capital LLC, spied treasure at Vancouver-based Intrawest. Its shares were trading at $32, and Hudson owned 5.8 million of them. That made him the company’s biggest shareholder and, in his eyes, the boss. So Pirate, which flaunts its “booty” motto on baseball hats, demanded Intrawest put itself on the block.”We urge you to fulfill your fiduciary duties to all shareholders by immediately initiating a sale of the entire company,” Pirate analyst Stephanie Tran wrote to the board. Five months later, Intrawest, with 24,800 employees, sold itself to Fortress Investment Group for $1.8 billion, or $35 a share. Pirate had begun buying the stock at $15.80.

Playing the Odds

Prostate_ThumbOne day in Chicago, Dave Bigg is about to drink a few beers with his buddies and divvy up Cubs baseball tickets when his cell phone rings. It’s the doctor, and he doesn’t like what he sees. Bigg’s biopsy looks bad. The cells from his prostate are warped and buckled. It’s cancer. Bigg can’t believe what he’s hearing. He’s 46 years old. He doesn’t look sick. He doesn’t feel sick. Hell, he feels great—he’s training for a triathlon. “It was like a punch in the stomach,” Bigg recalls.