Hedge Fund Pay Is Up, Middle Office Joins the Party in 2011
Hedge fund compensation is up for the second straight year, according to a new report by Glocap and Hedge Fund Research.
Here's some samples of total compensation, which varies based on job title, fund size, and performance:
- Senior Trader: small and mid-size fund, middle performance - $365,000
- Chief operating officer: large fund - $800,000
- Portfolio manager: small fund, top performance: $1.23 million
- Portfolio manager: larger fund, top performance: $4.85 million
- Investment professional (idea generator), large fund, middle performance - $1 million
- IR/Marketing professional with four-nine years experience: $253,000
Moving out of the front office to operational areas such as accounting, risk and process control, the picture isn't bad either. Howard Ross, managing partner at BOC Staffing says that 2011 will bring a shift from a buyers market to a "candidate driven" one, in which job seekers in alternative investments will field multiple offers, rather than scrambling for the same one as is the case currently.
Ross says that positions in demand at hedge funds are in areas such as compliance and due diligence, pricing and valuation, and business area control in funds that invest in commodities. Senior positions in international trade support, that can drive business at a hedge fund, can bring in $250,000, he says. Demand for professionals at funds -- small and large -- is dependent on a fund's strategy and which regions in which it invests.
"We're seeing a slight uptick in salaries and non-guaranteed bonuses," says Ross. Previously, he says, someone earning $150,000 at a fund might command only $120,000, with a 25-50 percent bonus. With conditions improving, it will go back to $150,000 with bonuses increasing to the 30-50 percent level.
Non-trading positions such as chief risk officer and trading support are those that are in demand. "We'll continue to see a shift as we enter the second and third quarter of 2011," says Ross. "Assuming that next year is a positive one, we'll see a candidate driven environment in the middle office at hedge funds, which will drive up base salaries."