Hedge funds may have had a bad January, but that hasn’t stopped pay rising – albeit at a slower rate than previously.
According to a new survey of 800 US hedge fund professionals, average pay packets across the industry rose 6-10% in 2007.
“The categories that saw the fastest rises were infrastructure professionals,” says Glocap managing partner, Adam Zoia, “Everything from fund accountants to investor relations professionals, and legal and compliance staff.”
By comparison, pay growth has slowed for the people actually managing the money – hedge fund managers and analysts.
“In 2006 pay for investment professionals was growing more in the region of 15-20%,” says Zoia. “It’s now down to the mid-single digits.”
The slowdown is partly due to reduced competition for staff: “Private equity hiring and recruitment from banks’ prop desks both slowed last year,” says Zoia. “I would expect a further slowing this year.”
Nevertheless, positive forces remain. According to Zoia, the continued inflow of assets into hedge funds, and increased competition between funds, will both drive recruitment. “There are more and more funds chasing investment ideas. Top people are needed to help funds stand out,” he says.
And although Glocap’s figures are drawn from US hedge fund types, Zoia says they hold true globally: “Typical comp packages in Europe are a translation of dollar packages into pounds.”
Hedge fund pay (at funds with $1bn to $3bn under management)
Investment professionals, five to nine years’ experience:
Average base: $214k
Average bonus: $620k
Total cash comp: $834k
Fund marketers, five to nine years’ experience:
Average base: $126k
Average bonus: $125k
Total cash comp: $251k
Hedge fund accountants – controllers
Average base: $60k to $90k
Average bonus: 30-75% of base
Hedge fund risk managers – director of risk management
Average base: $200k to $400k
Average bonus: 100-300% of base