If investment banks are hiking up salaries to counter regulatory clampdowns on bonus payments, hedge funds are still very much the places to get paid for performance.
A case in point is the UK arm of hedge fund Fortress Investment Group, which has just posted its 2014 accounts on Companies House. It paid out £16.4m in pay for its 63 employees last year – £11.3m of which was in bonus payments.
On an average payment per head basis, this means that employees received £85k in salary and £179.k in bonus payments – or 210% of their base.
In the current era of allowances, salary hikes and clawbacks, such generosity in bonus payments shows the benefit of working for a comparatively small hedge fund.
Fortress’ results are also another example of hedge funds’ recruitment running counter to financial performance. Revenues at the firm for 2014 were £26.3m, down from £31.2m in 2013, but it was recruiting regardless.
It ended 2013 with 55 employees, so hired an additional eight people throughout the course of 2014, or a 14.5% increase. Unfortunately, however, people earned less as Fortress expanded – average pay per head fell from £356.3k in 2013 to £263.4k last year.