Ray Dalio, head of Bridgewater, the world’s largest hedge fund, personally made $3.9bn in a year that his $70bn Pure Alpha fund produced $13.8bn of investment profits for its investors, according to industry rankings.

He tops a list published today by Absolute Return magazine of the richest 25 hedge fund managers. The select group took home $14.4bn in pay and paper profits on their own investments last year, down from $22bn in 2010 in a sign of the industry’s struggle to deliver returns for its clients in 2011.

The list is also a poor advert for the sector, as four of the top five managers made their money from funds closed to new investors. And it was only in January that all the investors in Citadel, the only open fund run by fourth-placed Ken Griffin, finally recovered losses sustained during the financial crisis.