Flogging hedge funds to investors is still a lucrative business.
With hedge funds buckling under the sub-prime strain, now may not be the best time to get a job extolling their virtues to the investment community. But if you’re prepared to put the little issue of investor scepticism to one side, you could be doing rather well for yourself.
A new salary survey from Schwab Enterprise, a US hedge fund search firm run by Claude Schwab (he of the Hedge Me guide to how to get a job in hedge funds), suggests hedge fund marketers with just two years’ experience can earn total comp of US$200k to US$350k (99k to 174k) at poorly performing funds, and up to US$675k at strongly performing funds.
Schwab’s figures are drawn from the US market, but should apply equally to US funds operating in London. Kirsty McAlpine, managing partner of asset management search firm Jamesbeck London, says pay for junior hedge fund marketers in the UK can be as low as US$160k to US$200k, but experienced hedge fund marketers can command US$2m plus.
Schwab says marketers have been hot in the US this year as hedge funds seek to improve their distribution capabilities. Right now, however, senior marketers are so busy talking (or explaining themselves) to clients who’ve lost money, that he says hiring’s been put on hold. McAlpine says the same thing’s happening in London: “August has given hedge funds pause for thought.”
The good news for struggling hedge fund marketers, however, is that funds on both sides of the Atlantic are said to be moving away from formulaic bonuses based on the amount of money brought in, in favour of more discretionary payouts. McAlpine says this is a plus in difficult market conditions: “Formulaic compensation is great when markets are hot, but it doesn’t protect salespeople during periods of poor performance when it’s hard to raise funds.”