In 1949, Alfred Jones formed the first hedge fund in the world by hedging his long equity exposure with short positions.

His divergence from the long-only approach in the fund management world gave birth to the hedge fund industry, which today controls trillions of dollars.

Jones’ hedge fund concept eventually took off. The modern hedge fund industry began in earnest in the 1970s and 1980s. In those early days, it was dominated by a few global macro managers like George Soros. In the 2000s, quant funds -- those that used complicated algorithms to find profits – took the spotlight.

However, many quant funds did not fare so well during the financial crisis, and discretionary managers like John Paulson came to the forefront once again.

In the industry’s 60 plus years of history, a lot of managers have gotten fabulously wealthy. The following is the list of the 10 richest hedge fund managers in the world, according to Forbes’ annual list of billionaires in 2011.

Click “Start” to view the slideshow.

John Arnold, king of natural gas
Net worth: $3.3 billion Fund: Centaurus Advisors Strategy: He trades in the energy market, specializing in natural gas. Reportedly, he generates his returns each year from a few concentrated bets. Unknown
Paul Tudor Jones, the global macro trader
Net worth: $3.3 billion Fund: Tudor Investment Corporation Strategy: Global macro. He is known for successfully shorting the Black Monday crash of 1987. Unknown
Edward Lampert, Mr. Buy-and-Hold
Net Worth: $3.6 billion Fund: ESL Investments Strategy: He holds concentrated and long-term positions in US stocks, many of them in the retail sector. Reuters
Bruce Kovner, the secretive global macro manager
Net worth: $4.5 billion Fund: Caxton Associate Strategy: He is notoriously secretive, so not much is known about his strategy. Early in his career, he traded commodities. www.panachemag.com
David Tepper, king of distressed investing
Net worth: $5 billion Fund: Appaloosa Management Strategy: Tepper employs various strategies, but he's known for successfully investing in distressed assets. tepper.cmu.edu
Ray Dalio, the methodical investor
Net worth: $6 billion Fund: Bridgewater Associates Strategy: Dalio's fund invests globally in instruments like currencies and bonds; he is known for his rigorous and methodical investment process. www.bwater.com
Steven Cohen, King of the stock market
Steven Cohen may escape prosecution Reuters
James Simons, king of quants
Net worth: $10.6 billion Fund: Renaissance Technologies Strategy: He and his fund use complicated mathmatical models to identify and profit from mispricings/patterns in various financial instruments around the world. Reuters
George Soros, godfather of global macro
Net worth: $14.5 billion Fund: Soros Fund Management Strategy: Global macro, which means he'll go pretty much anywhere and in any asset to find attractive returns. He is a pioneer of the global macro strategy. Reuters
John Paulson, the man who made the greatest trade ever
Net worth: $16 billion Fund: Paulson & Co Strategy: He started out in merger arbitrage but made it big with his macro trade against subprime mortgages. Reuters
George soros