How much am I worth?Portfolio manager, fixed income

A panel of specialist headhunters give their assessment of typical London pay packages: portfolio manager, fixed income: salary 80,000, bonus around 150% for strong performers

Have the bears gone back into hibernation, or at least been put to bed? As the FTSE 100 edges upwards and Wall Street recovers its nerve, investors in equities are beginning to feel things are finally moving their way - which could be bad news for the fixed income market.

Traditionally, when equities have picked up, fixed income slumps: 2004 may be no exception, as almost everyone thinks government bonds are over-priced. If so, what can the fixed income portfolio manager expect of the year?

Plenty of work, according to most headhunters. The increasing complexity of the market has created more and more types of asset that need to be managed, often in growing volumes. Pay-wise, this is good news.

Chris Manfield of Odgers, Ray & Berndtson said bonuses received this year by fixed income portfolio managers are likely to be 20%-30% up on last year, with equities portfolio managers receiving a similar increase. That marks a turnaround from a year ago, when bonuses generally fell.

Simon Bell, head of asset management at Napier Scott, said: "Global fixed income chief investment officers are steadily building on their capacity, product, research and specialist offering. Where structured products are becoming de rigeur, credit, high yield, distressed debt and convertible bonds follow on."

Bell said the mood had improved since a year ago, when salaries were about 5% lower than in 2002 as the slump in equities at that time affected fund managers' overall profits. Firms cut costs as they anticipated a further squeeze on profits.

Napier Scott said average salaries for fixed income portfolio managers are now about 80,000, rising to around 130,000 for a team or desk head. Bonuses? Highly variable, but anything between 120% to 300% this year for a strong performer.

Russell Adam of Adam Grant said many portfolio managers earned bonuses of well below 100%.

Alexander Mann was circumspect on bonuses this year, pointing out that the lack of profitability at many firms remains a problem. It said bond specialists with a good track record are often better rewarded than their equity counterparts

Martin Symon at Alexander Mann said: 'In the case of corporate bond fund management specialists, demand has generally exceeded supply. Those with a track record in this sector can command a premium to the equivalent government bond fund manager."

Manfield said that despite rising bonuses, few fund managment firms are currently hiring portfolio managers. They are focusing instead on sales and marketing staff. Adam said: "There is some demand for portfolio managers with typically seven or eight years experience, to be a number two to a head of fixed income."

Bell said portfolio managers looking for work need to show a wide range of skills as well as a good track record.

Strong communications and team skills are at a premium, as well as an understanding of the innovations taking place in the market.

Figures and commentary by Napier Scott, Alexander Mann and Odgers, Ray & Berndtson and Adam Grant