Moving to a hedge fund in 2019 is a risk. A report last week from Goldman Sachs said that of 468 hedge funds Goldman's prime brokerage had done business with since 2009, almost half were no longer in existence. To have a chance of survival, Goldman said new hedge funds need at least $250m in asset under management - and ideally even more. To really be assured of survival, funds need to start out managing $1bn+.
This makes joining a new hedge fund a risky career prospect. If you're going to leave a banking job for a fund you probably therefore want to join an established player, like those we've listed below.
How much do these big hedge funds pay in salaries and bonuses (or profit sharing)? In the UK, companies - hedge funds included, are compelled to register annual accounts with Companies House. This doesn't always equate to transparency - Brevan Howard had 16 registered entities last time we looked, but it does shed some light on hedge fund pay.
In the table below, we've broken out salaries for the rank and file and profit sharing for partners and directors at some of the UK's best known hedge funds. Figures are as comparable as possible, but this being hedge funds there are some complications. Citadel Investment Group might look like it's paying a huge £125m to a single partner, for example, but one of Citadel's partners is another Citadel company (as is common in other hedge funds too) employing multiple people.
Many of the figures are at least 12 months old. Balyasny's figures, for example, pre-date its redundancies at the end of 2018. On the whole, however, they suggest a degree of similarity in hedge fund salaries, with standard packages seeming to fall between £200k to £300k. Partner pay is far more variable, as is to be expected in an industry where partners take a share of often highly volatile profits.
Some of the hedge funds listed below are large employers. Winton Capital Management, for example, has 375 employees. BlueBay has 317. Aspect Capital has 142. As such, they're now covered by European regulations and compelled to defer bonuses for key risk takers. - The days of eating your hedge fund kill are over in Europe.
Unless you're a partner, this may make hedge funds seem less alluring employers than before. At Goldman Sachs in London, average salaries were £314k in 2018, higher than at most hedge funds in the table below. And once you've joined a hedge fund it can be very, very difficult to leave again.
Have a confidential story, tip, or comment you’d like to share? Contact: email@example.com in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)
Image: Getty Images