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Ray Dalio has been sounding the alarm about income inequality and a new ranking of top hedge fund managers demonstrates that he knows what he is talking about.

Dalio, the co-founder of Bridgewater Associates who recently sounded an alarm that capitalism is not working for most Americans, sat atop the annual “rich list” of the highest-earning hedge fund managers released by Institutional Investor on Tuesday.

The magazine estimated his earnings at $2 billion last year, an improvement on the $1.3 billion he made in 2017, when he was in fourth place.

Dalio was followed by last year’s top finisher, James H. Simons of Renaissance Technologies, who made $1.5 billion, down from $1.7 billion in 2017. Kenneth Griffin, the founder of Citadel, earned $870 million for third place, the same as last year, when he earned $1.4 billion.

The rich collection of zeros and commas continued with John Overdeck and David Siegel, the founders of Two Sigma, who made $820 million each. Israel A. Englander of Millennium made $750 million, Crispin Odey of Odey Asset Management $530 million, David Shaw of D.E. Shaw Group $500 million and Chase Coleman of Tiger Global Management $465 million. Alan Howard of Brevan Howard rounded out the top 10 with $390 million.

Dalio’s lieutenants Greg Jensen and Bob Prince each made $325 million to tie for 12th. Near the bottom of the list — at No. 22 — was Steven A. Cohen, the founder of Point72 (formerly known as SAC), who made $70 million.

The large payouts actually reflect the latest in a run of rough years for hedge funds. When Dalio was last atop the list, in 2011, he earned $3.9 billion, according to the magazine.

Many funds were dragged down by the steep declines of the stock market in December. The industry lost 4.1% for the year, according to Hedge Fund Research.

Institutional Investor calculated the managers’ income by adding what they received in management and performance fees to the earnings on their investments in the funds they oversee. That allowed the strong performances of Bridgewater (a 14.6% gain in 2018) and Renaissance (8.5%) to help Dalio and Simons reach the top of the list.

The magazine noted that the managers’ gains on their own capital had played a significant role in their ability to qualify for the list this year.

In recent weeks, Dalio has raised the issues of income inequality, economic mobility and shortcomings in public education as he has sought to discuss ways to improve opportunity.

“As most of you know, I’m a capitalist, and even I think capitalism is broken,” he wrote on Twitter on April 7.

Dalio, of course, defends the hedge fund business model.

“If you were to ask the pensioners and you were to ask our clients, who are teachers or firemen, whether we’ve contributed to their well-being, they would say that they we contribute,” he told NPR last week.

But the magnitude of the hedge fund managers’ compensation raises a very basic question about whether capitalism is “broken.” After all, even if Dalio took home $500 million, the rest of his income could pay 10,000 families $150,000 each.

Dalio described the tension between increasing the size of the economic pie and exactly how to divide it. Capitalists, he told NPR, “don’t know how to divide the pie very well.” And those on the left “might not know how to make that economic pie grow well.”

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