Tuesday, 29 July 2014
Last updated 7 hours ago
Jan 17 2014 | 1:23pm ET
Last year was a disappointing one for hedge fund managers—until bonus time, that is.
The average hedge fund ended 2013 up about 10%, according to industry indices. Compared to the broader markets—the Standard & Poor's 500 Index rose nearly 30%—that's not impressive at all. But with hedge funds taking about 20% of those profits, it still left a lot of money to go around.
Overall, average cash compensation jumped 16% last year to $330,000, according to Benchmark Compensation's annual report. Most of that, however, was due to a 30% increase in bonuses, with base compensation rising just 4% on the year.
"As we reported last year, fund performance results in significant bonuses, especially for those closely involved in the investment decisions," HedgeFundCompensationReport.com's David Kochanek said. "This wasn't always the case, but in a post-recession market, pay for performance is now the rule."
"For those in decision-making roles, this level of performance results in tremendous compensation. Thirty-one percent of hedge fund employees expected 15% to 100% more money while 5% expected to see their compensation more than double."
According to the survey, more than 90% of hedge funds enjoyed gains last year, with only 3% reporting losses. Fifty-four percent of respondents posted double-digit gains, and 18% returned 25% or more.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…