Hedge funds have a reputation for paying huge sums, particularly in locations like London and New York, but what about in the Asian hub for the industry, Hong Kong?
Hong Kong portfolio managers earn base salaries of HK$640k to $HK3m (US$82k to US$385k), depending on seniority, according to pay data we’ve averaged out from recruitment-agency salary surveys and presented in the table below.
But these salaries are still smaller than those paid by hedge funds in the West, and they also lag those in Hong Kong investment banks, says Laikee Tang, a partner at LT Advisers in Hong Kong.
Portfolio manager bonuses, which typically compromise the bulk of their compensation, are more difficult to define in Hong Kong.
Rather than a multiple of salary, portfolio managers instead earn a percentage of the performance they bring in. Bonuses are also tied to assets under management (with larger funds tending to pay more) and the generosity of the partners.
“Top performing PMs get bonuses so big that their salary is almost irreverent,” says Will Tan, a former Citi equity researcher, now managing partner at headhunters Principle Partners.
“But overall compensation in Hong Kong hedge funds is generally down year on year for PMs because bonuses for 2016 were down, especially at macro and equity long-short funds,” he adds.
Asia’s hedge funds trailed their global peers last year for the first time since 2011, according to Eurekahedge data. And in September TPG-Axon Capital Management closed its Hong Kong office.
“Hedge funds pay bonuses to PMs for performance, and if you don’t perform, you shut down. Even if you personally did ok last year, your team might well not have – and your bonus will be averaged down as a result,” says Tan.
The relatively lowly execution traders sometimes don’t receive a bonus at all, say headhunters, but still earn decent base salaries compared to other front-office staff. By the time they reach SVP/director level, they can take home HK$1.5m (US$193k) on average.
Image credit: Norasit Kaewsai, Getty