Ray Dalio has been sounding the alarm about income inequality, and a new ranking of top hedge fund managers demonstrates that he knows what he's talking about.

Mr. Dalio, the co-founder of Bridgewater Associates who recently sounded an alarm that capitalism isn’t working for most Americans, sat atop the annual “rich list” of the highest-earning hedge fund managers released by Institutional Investor on Tuesday.

The magazine estimated his earnings at $2 billion last year, an improvement on the $1.3 billion he made in 2017, when he was in fourth place.

Mr. Dalio was followed by last year’s top finisher, James H. Simons of Renaissance Technologies, who made $1.5 billion, down from $1.7 billion in 2017. Kenneth Griffin, the founder of Citadel, earned $870 million for third place, the same as last year, when he earned $1.4 billion .