12 Jan 2012
The 2012 Hedge Fund Compensation Report revealed that hedge fund managers anticipated an increase in base salary but a shortfall in year-end bonuses. The average reported cash compensation for 2011 was $311,000, just slightly higher than last year's compensation. The annual industry report is based on data collected directly from hundreds of hedge fund managers and employees.
Last year 45% of hedge fund professionals reported double-digit positive returns for their fund. This year that number dropped to only 16%. The number expecting their funds to be down 10% or less went from 3% to 22%. Only 4% expect their funds' performance to sink by double digits.
This decrease in fund performance and bonus payout has some professionals worried. Employees surveyed cited market conditions and the pace of redemptions as concerns and the hedge fund job market is supporting those concerns.
According to this year's report, although one out of four funds is looking for research analysts, there is little other hiring going on in the industry. Even in this difficult environment, 44% reported that, overall, they are happy with their compensation.
The 2011 Hedge Fund Compensation Report is based on compensation data collected directly from hundreds of portfolio managers and employees from firms, both large and small, during October and November 2011. The contents of the full report can be found here.
The Report has grown to become the most comprehensive benchmark for hedge fund compensation practices. Respondents participating over the years represent some of the largest and most recognized hedge fund firms as well as a cross section of leading financial institutions with hedge fund activities.
Last year 45% of hedge fund professionals reported double-digit positive returns for their fund. This year that number dropped to only 16%. The number expecting their funds to be down 10% or less went from 3% to 22%. Only 4% expect their funds' performance to sink by double digits.
"Given the drop in fund performance this year, hedge fund professionals fared pretty well," said David Kochanek, Publisher of HedgeFundCompensationReport.com. "Except for only a few positions in the firm, increases in base pay more than covered the lower bonuses."
This decrease in fund performance and bonus payout has some professionals worried. Employees surveyed cited market conditions and the pace of redemptions as concerns and the hedge fund job market is supporting those concerns.
According to this year's report, although one out of four funds is looking for research analysts, there is little other hiring going on in the industry. Even in this difficult environment, 44% reported that, overall, they are happy with their compensation.
"We've seen this before. When the investment job market tightens, professionals report more satisfaction with their pay. Their focus changes from greener pastures and moves to becoming content with where they are," said Kochanek. "And, among hedge fund employees, there might be good cause for celebration -- that is, celebrating that they don't work for one of the big banks."
The 2011 Hedge Fund Compensation Report is based on compensation data collected directly from hundreds of portfolio managers and employees from firms, both large and small, during October and November 2011. The contents of the full report can be found here.
The Report has grown to become the most comprehensive benchmark for hedge fund compensation practices. Respondents participating over the years represent some of the largest and most recognized hedge fund firms as well as a cross section of leading financial institutions with hedge fund activities.
