If you’re a trader in an investment bank looking at your (relatively) pitiful pay packet and pondering a switch into a hedge fund, consider Och-Ziff Capital Management.
While banks clamp down on compensation and continue to be weighed down by a lack of volatility, the hedge fund has just posted double-digit growth in income and has ramped up pay by 21% so far this year.
Och-Ziff has allocated $59m for compensation and benefits for the first half of this year between its 552 staff worldwide. This amounts to around $106k per head, or a 21% increase on 2013. As ever, this is unlikely to be allocated evenly – only 149 people worked in investment functions as of 31 March 2014 and will be receiving the lion’s share.
Revenue for the firm has increased by 15% to $262.5m on the previous year, largely due to an rise in management fees. It’s also managed a 25% swell assets under management, to $45.9bn as of 30 June 2014.
Under the circumstances, it’s no surprise that Och-Ziff has felt the need to dig a little deeper, although it pins the increase in compensation primarily on more hiring globally rather than a larger allocation towards variable compensation.
Both the increase in compensation and headcount should pique the interest of traders attempting to get out of investment banking. As we’ve mentioned previously, there are a lot of people attempting to move across to the buy-side, but only a few succeed. Those that do are either exceptional, or are taking advantage of hiring at expansive large hedge funds like BlueCrest Capital Management and Millennium Partners, both of whom have been poaching from investment banks.
Och-Ziff, one of a handful of publicly traded hedge funds, presents another opportunity to make the switch. With over 500 employees, it’s by some distance one of the larger firms – and now it’s paying more.
There’s little evidence of this hiring spree hitting London yet, though. Only Hugh Cutler, who joined in May as a managing director from Legal & General Investment Management where he was head of Europe and the Middle East, has signed up this year.