Hedge Fund Pay To Rise 5% This Year

Nov 5 2010 | 12:03pm ET

The average U.S. hedge fund manager will make more this year than last year—but not as much more as he or she made from 2008 to 2009.

Year-end bonuses at hedge funds are expected to rise 5% in 2010 after jumping 15% last year—a year in which the hedge fund industry bounced back from its worst-ever year in 2008. The average hedge fund manager at a large, top-performing firm will take home almost $5 million this year, while those at smaller firms will earn a more modest $1.23 million, according to a survey by Glocap Search and Hedge Fund Research.

“Hedge fund compensation in 2010 is not exclusively about management and incentive fees, but also about duration, liquidity, transparency and retention, as well as operational and organizational efficiencies," Kenneth Heinz, president of Hedge Fund Research, said. "As the hedge industry continues to grow and evolve, the compensation model which defines the fundamental economic relationship between investors and fund managers will continue to evolve with it."


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