Are Brevan Howard's results further proof that it only really makes sense to work for a hedge fund if you're a partner?
Much is being made about the lavishness of Brevan Howard's payments to its partners in the patently disastrous eight months to March 2009.
Despite the near disintegration of the world as we know it, Reuters and various other sources pointed out yesterday that 45 Brevan Howard partners earned an average of 1.9m each over this period, an annualised rate of 2.85m.
In reality, the payouts to BH partners may have been even more lavish still. The company's reports reveal that the average number of 'members' (AKA partners) for the period in question was actually only 33. They also point out that the highest paid member (Alan Howard?) received 440m.
However, the results for Brevan Howard Asset Management sit somewhat uncomfortably alongside those for Brevan Howard Services.
As the Telegraph pointed out earlier this year, pay at Brevan Howard services, which provides 'staff and infrastructure' services to Brevan Howard Asset Management fell substantially in the eight months to 31st March 2009.
On an annualised basis, pay at the service arm was down 66% over this period, even as staff numbers there rose. The average member of Brevan's support team received a (not immodest) 253k for the period - substantial, but peanuts compared to the partners.
Also, Brevan Howard is exceptional
Needless to say, other hedge funds are doing far less well than Brevan.
Zero Hedge recently pointed out that Citadel Assets are down $500m year to date.
Alex Pigault, chief exec of Allenbridge HedgeInfo says some long biased hedge funds in the equity and fixed income space are still below their high water mark. The worst off are fund of funds, says Pigault: 90% are below the high water mark and therefore not earning performance fees. Support staff there are possibly living on lentils.
