New York (HedgeCo.Net) – Industry reports show that hedge fund compensation increased in 2014 as total capital invested in the hedge fund industry again reached new records, Bloomberg reports.
“Hedge fund compensation structures continued to evolve in 2014 as industry capital reached record levels, balancing competing pressures for talented finance professionals from other industries against increased pressure for lower fees and long-term performance-based compensation packages.” The 2015 Glocap Hedge Fund Compensation Report, said. The report was released by Glocap Search and HFR®.
- Portfolio Managers at top performing funds are approaching eight-figure compensation levels.
- Analysts at large hedge funds, managing greater than $4 billion and performing near the industry average, experienced a base salary increase of 6 percent and a bonus increase of approximately 5 percent, for an average compensation increase of 5.4 percent to a total compensation of $372,000.
- Portfolio Managers and other Senior Investment Professionals at large hedge funds saw less change in their base salaries, with these typically earning an average base salary of $275,000, although bonus increases ranged from 2 percent to 15 percent, topping the average increase from 2013.
- Overall, the average compensation for a PM of a large fund with performance near industry average increased by nearly 8 percent to $2.4 million.
Over the first three quarters of 2014, global hedge fund industry capital exceeded $2.82 trillion, the ninth consecutive quarterly asset level record, as the HFRI Fund Weighted Composite Index gained +2.90 percent YTD. The percentage of all hedge funds which reached their high watermarks YTD through September also rose to 68 percent, a sharp increase from the 48.4 percent of funds, which had reached respective high watermarks only two years prior (2012).
“Hedge fund bonus pools continue to grow in 2014, inflated by management fee income, even if the performance contributions are more variable. But hedge funds will again be increasing their pay to retain and attract top talent, especially as more capital enters this competitive market,” notes Anthony Keizner, head of Glocap’s Hedge Fund practice.
Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
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