Edward Lampert, the investor who masterminded the merger between Sears and Kmart, has been named as the world's highest-paid hedge fund manager, as he took more $1bn home last year.

Mr Lampert, who controls ESL Investments, has been ranked number one in Institutional Investor's Alpha survey of hedge fund managers' incomes. His $1.02bn pay packet is the highest sum to be earned in the four years the magazine has been tracking these earnings.