Fund managers benefit from bonus bounty

Fund managers saw substantial increases in their bonuses for 2005 according to recruiters in the sector.

"Base salaries in fund management have largely remained stable," says Petra Rickmeyer, a director at search firm Hoggett Bowers. "But bonuses in 2005 increased by between 50% and 70% on 2004."

Earlier this week,Financial News quoted Kim Yates, a director at Principal Search, as saying that bonuses for 2005 have returned to their peaks of two to three years ago. Yates said fund marketers can now receive salaries of 100,000, plus bonuses of 300%.

Rickmeyer attributes the upturn to strong business conditions. "The market generally has picked up, performance has been good, and we now have a group of fund managers who are very good at what they do," she says. "Recent difficult markets have given managers experience in picking the right stocks. And given that 2004 was a mediocre year and 2003 was very weak, the increase is not really all that surprising."

News of rising pay follows a spate of strong results. Earlier this week, it emerged that funds under management at Martin Currie Investment Management rose to record levels last year, and that pre-tax profits at the company leapt nearly 50%. Similarly, operating profits at New Star Asset Management, the newly listed UK fund manager, rose 82% last year.

Rickmeyer says higher profits have been carefully distributed: "There is a widening gap in pay between high and median performers."