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Leading hedge fund’s results suggest its employees are mainly working to further enrich its star trader

Star traders take all the heat

Star traders take all the heat

It’s often a problem at boutiques and smaller firms of any kind: a few big beasts at the top of food chain wield disproportionate power and there’s a lot less of the bureaucratic cushioning and the meritocratic mantras that you get at big banks. Fundamentally, if you join someone’s hedge fund and they choose to pay themselves most of the profits you and your dispensable colleagues help generate, there’s not really very much you can do about it.

Two years ago, for example, Brevan Howard had a bad year and paid its partners very generously whilst seeming to cut pay for everyone else. Last year, it wasn’t quite that bad at Comac Capital – but it’s quite bad.

Comac Capital is the London-based discretionary global macro fund manager run by Colm O’Shea, an Irish-born Oxford-raised ex-Citigroup prop trader and former senior macro trader at George Soros’ Quantum Fund. It’s just released its annual results for the year ending March 2012.

During these 12 months, Comac allocated £37m of its £47m in profits to its 12 partners, the highest paid of whom received £26m.

This highest paid employee is probably O’Shea himself. Other Comac partners include: Joshua Greene, head of research and analysis, Malcolm Butler, chief operating officer, and Michael Perry, chief compliance officer.

Meanwhile, another £10.4m in compensation was allocated to Comac’s 40 employees. They earned an average of £261k each. This is not at all bad, but still a little galling when you consider that one partner/’member’ – probably O’Shea, but possibly someone else – appears to have earned 100 times as much as the average and that in a company employing 40 people, 55% of the total amount allocated to compensation appears to have gone to a single individual.

Banks look positively egalitarian by comparison: Jamie Dimon’s pay was only 60 times higher than the average JPMorgan investment banker’s last year.

Comments (2)

Comments
  1. I love the fact that every bonus payout has to have a negative spin. Let’s look at this from another angle. Comac is an LLP which means that the ‘partners’ are not solely founding members creaming off the work of the people they have brought in but instead people that they have hired and promoted to partner due to good work; similarly to any accountancy or legal firm. That means that the remaining 40 members of staff which includes, assistants, accountants and back office support staff are picking up an average of £261k a year which is well over what they would be paid elsewhere. If anything I would say that it sounds like this firm are sharing out the profits pretty well rather than using them towards hiring in other area in a bid to try to expand into markets they do not know as well to ‘fuel their greed’ which is what you find at many successful funds. How many people in funds have worked hard and made money but picked up very little due to losses in another area of the firm?

  2. I’m with Headhunter. 40 overpaid flunkies made an average of £261,000 each and eFC turns it into a diatribe about how the workers are being exploited by the capitalist pig at the top. Who’s running this site? The Socialist Workers’ Party? Or maybe a Lib Dem? I think anyone at Comac who doesn’t like it should surely either have a rethink and smile and be grateful or pack it in and leave tout de suite. No business owner wants a disgruntled, undeserving, miserable whinger around. They are like a cancer, or a poison, spreading their ill will around to other overpaid, under-deserving employees. Employee number 1 is taking well less than 50% of the total compensation and profits for himself and paying the rest to all other employees. Considering he/she is probably the one who took all the risk starting this venture and he/she surely is the brains behind the success (and owns all the true equity) I don’t see a thing wrong with that other than the attitude of folks like eFC who think the most successful don’t pay their “fair share”, whatever that means.

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