One hedge fund manager made $2 billion last year from a decade-old bet on Avis as the company briefly achieved meme-stock status and soared 456%

• Hedge fund manager Karthik Sarma at SRS Investment made about $2 billion in 2021, largely on Avis stock, Bloomberg reported.
• Sarma's net worth boomed to $3 billion with help from an 11-year-old wager on the car rental company.

A 47-year old hedge fund manager made roughly $2 billion in 2021, largely on the back of a bet he made on Avis Budget Group as the value of the car rental company's stock rocketed last year, according to a Bloomberg report Tuesday.

Karthik Sarma, managing partner at SRS Investment, placed the wager on Avis stock 11 years ago. Then came the meme-stock craze, and shares zoomed up by 456% last year to end at $207.37, aided in part by a short-squeeze in one session in November that sent the price charging up as much as 212%.

SRS owns about 50% of Avis through common stock and swaps that contributed to Sarna's net worth roughly tripling to $3 billion, Bloomberg reported Tuesday, citing an analysis by the Bloomberg Billionaires Index. That ownership also helped draw in a 35% gain for investors in Sarna's flagship fund.

Sarma has now moved near the top of Bloomberg's 2021 ranking of hedge fund earners, trailing slightly behind top earner and Citadel boss Ken Griffin and Chris Hohn at TCI Fund Management.

SRS manages more than $8 billion compared with more than $40 billion in assets managed by Citadel and TCI Fund each, the report said.

While Sarma made a hefty amount of money, he appears to live a modest lifestyle – moving in with his sister and her family during the pandemic and living in a middle-class New Jersey suburb.