Survey: Hedgies Expected Lower Bonuses In 2011

Jan 10 2012 | 1:17pm ET

Hedge fund managers expected higher base salaries but lower bonuses in 2011, according to the 2012 Hedge Fund Compensation Report.

The average reported cash compensation for 2011 was $311,000—slightly below 2010 levels—according to the report, which is based on a survey of “several hundred” hedge fund managers and employees. (Publisher David Kochanek of HedgeFundCompensationReport.com told FINalternatives they do not reveal the exact number of respondents but said this is the survey’s fifth year and they are “confident in the results.”) The survey was done in October and November 2011.

In 2010, 45% of hedge fund professionals reported double-digit positive returns for their funds. Last year, that figure dropped to 16%. The number expecting their funds to be down 10% or less went from 3% to 22%. Only 4% expected their funds' performance to sink by double digits.

"Given the drop in fund performance this year, hedge fund professionals fared pretty well," said Kochanek. "Except for only a few positions in the firm, increases in base pay more than covered the lower bonuses."

The report also reveals that, although one in four funds is looking for research analysts, generally there is little hiring underway in the industry. It also notes that a full 44% of respondents 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."

HedgeFundCompensationReport.com is a division of Hedge Fund Jobs Digest, a Web-based career service catering to hedge fund professionals since 2002.


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