The world’s 25 best-paid hedge fund managers took home a combined $21.1bn, 50 per cent more than in 2012, as surging equity markets helped them to one of their highest earning years since the financial crisis.

At a time when rising inequality and corporate pay is generating increasing debate on both sides of the Atlantic, David Tepper, the founder of the US hedge fund Appaloosa Management, was the world’s highest earning hedge fund manager last year. He took home $3.5bn and topped the list for a second consecutive year after wagering on the recovery of the US airline industry, according to the annual survey by Institutional Investor’s Alpha magazine published yesterday.

Steven Cohen, founder of SAC Capital, was the second highest earning hedge fund manager, in a year when his firm was forced to pay a record $1.8bn fine to settle an insider trading case and close his fund to outside investors.