When choosing to work for a hedge fund, traders and portfolio managers often face the choice of going for an ‘institutional’-sized fund, where the job security is comparatively high but the pay is comparatively low, or going for a smaller player, where the risk of collapse is much greater, but a select group of partners divide the any profits up between them.
BlueBay Asset Management, the hedge fund owned by Royal Bank of Canada, appears to offer the best of both worlds. Despite relatively static profits for the year to 31 March 2015, it’s been hiring and paying its staff as much – if not more – than it’s more turbulent rivals.
BlueBay paid out £68.7bn to its employees, according to accounts just released on Companies House in the UK. This equates to an average of £202.9k ($308.2k) per head.
Yes, this might be lower than the likes of Goldman Sachs, but it still compares well to its fellow hedge funds. Brevan Howard, for instance, paid an average of £180k ($273.4k) to its 178 employees last year, while the latest figures for Bluecrest Asset Management show mean payouts of £236k ($359k).
And while Brevan Howard has dispensed with the services of some its key employees over the past 12 months – and churn of traders remains an issue at Bluecrest – BlueBay has been expanding.
During the 12 months to March 2015, BlueBay made revenues of £228.2bn. It has 335 employees, up from 297 in the year ended 31 March 2014. The majority of these (186) do work in infrastructure roles, but investment management headcount has been expanding nonetheless. BlueBay now has 80 people in money management roles, up from 71 at the same point in 2014.
Still, at the other end of the spectrum it can be very lucrative to work for a small hedge fund. Baupost Group, the Boston-headquartered hedge fund, has also just released the results for its London operation.
It paid its six employees £6.5m, or an average of £1.08m. However, four of its employees work in investment management and two in administrative roles, so this compensation pot is unlikely to be divided equally.