Senior U.S. hedge fund managers' average wages topped $1.5 million this year as demand for staff to manage the industry's growing assets outstripped supply.
A survey published by headhunter Glocap Search, publisher Institutional Investor News and data provider Lipper HedgeWorld showed average wages for investment staff with more than 10 years' experience topped $1.5 million a year, for the first time, in 2005. This is just base salary and bonus - many managers will earn more from equity interests in the hedge fund management firms they work for.
Compensation in the U.S. hedge fund industry overall climbed by an average of roughly 10 to 15 percent in 2005.
Adam Zoia, managing partner at Glocap, said the rise had come about because assets, and the number of individual investment managers used per $100 million of assets under management, had increased more quickly than the number of qualified individuals available to fill the open positions.
Experienced traders at top-performing hedge funds can now take home total compensation of more than $580,000 a year, the report said. Chief operating officers at the largest firms earn more than $800,000 a year in base salary and bonus.
Compensation climbed the most for risk managers, compliance officers and marketing professionals, the survey found. Annual earnings for those types of positions rose by 20 percent compared to last year.
The survey analyzed the compensation of more than 850 hedge fund staff at more than 325 U.S. hedge fund firms between 2003 and 2006.