Best comment in May? Jeff Zeeman:

Nazis, sex, and explosions: it’s official, Ephblog has turned into a Jerry Bruckheimer movie.

Links added. I am not as familiar with the Bruckheimer oeuvre as Jeff, but aren’t we missing something? How about unimaginable wealth (c.f., The Rock, Pirates of the Caribbean and National Treasure)?

No worries! EphBlog has that covered. What Eph made the most money last year? Not me! Could it have been Chase Coleman ’97?

Chase Coleman
City: New York
Firm: Tiger Global Management
Age: 31

One of the youngest members of the Trader Monthly 100, Coleman now manages roughly $2 billion in assets; his returns last year were in the neighborhood of 30 percent.

Estimated Income: $75-100 million


1) Does the listing of the big money makers include any other Ephs? The Alumni Office would like to know!

2) Trader Monthly is not the world’s most authoritative source, but, even if they are remotely accurate, Coleman must have done well. If I were Morty, I would recruit him to the trustees.

3) How does the math work? Well, if Coleman’s benchmark was the S&P 500 (which returned 13% in 2006), then he produced 17% in excess returns. On $2 billion, that would be $340 million in value creation for his clients. 20% of that (a typical hedge fund performance fee) would be $65 million. Add in a 1% fixed fee of $20 million, and you get $85 million total. I initially suspected that this was a (slight?) overestimate (rumors of returns and assets under management are often exaggerated), especially since Coleman needs to pay his (many?) employees. But, some further gossip suggested that, if anything, Coleman is doing even better than this. Impressive!

4) Previous coverage of Coleman here and here — and how come no one pointed out the other Ephs in the wedding pictures? Coleman’s 10th reunion is next month. One hopes that he gave big.

5) All of this raises the timely topic of income inequality. The short version of this story is that the rich are getting richer and that this is even more true the further out in the tail that you go. (Background here. See here for more technical details.) Even within the exceptionally wealthy population of Williams alumni, Coleman has done well. In fact, I would wager that he, alone, made more money last year than the sum of every other member of the class of 1997.

Does that bother me? No! Coleman is both lucky (not every Eph gets to work at Tiger Management) and talented. But others had similar opportunities and made different choices. Coming out of Williams, you are unlikely to get (self-made) rich unless you go into finance. Nothing wrong with teaching or military service or non-profit work (I have done all three!), but don’t whine about income inequality (at least in the Williams context) if you make those choices.

Or, better yet, whine here. If income inequality (at the high end, leaving aside poverty) bothers you in general, please explain why it bothers you in Coleman’s case specifically. Don’t begrudge the (self-made) wealthy their rewards unless you are willing to criticize one of our own.

What is wrong with a world in which rich, sophisticated investors want to pay lavish sums to Chase Coleman ’97 to manage their money?

Print  •  Email