Four hedge funds quietly paying out millions to their employees
While the festive season is usually the time that most people like to wind-down until the end of the year, for hedge funds in the UK, it’s reporting season. Or, more specifically, it’s when they quietly release their annual accounts on to the Companies House website just in time to meet their legal obligations and during a period when they’re least likely to be noticed.
However, these accounts reveal a mixed bag of performance and unveil details on the often eye-watering sums that hedge funds pay their partners annually. Here’s a breakdown of the funds who have reported in the last two weeks.
Cheyne Capital Management
Good or bad year? Not great – profits for the year ending March 2013 came in at £28.1m, down from £46.7m during the same period in 2012. It's worth noting, however, that Cheyne's total return credit fund was up by 40.7% for the remainder of 2013, and its convertibles absolute return fund by 12% to November.
Partner pay: The poor performance hasn’t translated into a proportionate drop in pay for partners. £21.4m was allocated to partner remuneration, down from £32.9m in 2012 to be divided between its 52 members.
Biggest pay packet: £6.4m, presumably given to either one of the co-founders Stuart Fiertz or Jonathan Lourie, which is down from the £11.2m handed out to the highest earner in 2012.
Pay for rank and file staff: It allocated £6.7m to its staff this year, down from £7.7m the previous year, and does not disclose how many people it employs.
Marathon Asset Management
Good or bad year?: Very good indeed – it made record profits of £172m for 2012-13.
Partner pay: £169.5m was allocated to member remuneration for the year, but it actually shelled out £317m for the period following a relatively prudent year in 2012 when £26m was paid to its 4 partners.
Biggest pay packet: £104m, allocated to Jeremy Hosking, a founding partner who left the firm last year after 26 years following a bust-up over control of one of Marathon’s funds.
Pay for rank and file staff: 77 employees shared £40.6m between them, up from £36.5m in the previous year. This works out as an average of £527k.
Oxford Asset Management
Good or bad year?: Compared to the previous 12 months, it’s been a successful year for the quantitatively-driven hedge fund. It made £90.5m for the year to March 2013, up from £51m in 2012.
Partner pay: The profits allocated to member remuneration has shot up – it stood at £86.8m, up from £47.5m in 2012, to be shared between seven people.
Biggest pay packet: £44.8m (up from £23.1m in 2012), presumably paid out to its principal and founder Dr Andre Stern.
Pay for rank and file staff: N/A
Pelham Capital Management
Good or bad year?: The members at Pelham have every reason to feel good about themselves for the 2012-13 period. Profits were £44.2m, more than double the £19.2m it made during the previous year.
Partner pay: These profits were all handed over for member remuneration. There are 10 partners, which means an average payout of £4.4m.
Biggest pay packet: The partner receiving the largest amount of cash pocketed £26.4m this year, however, up from £15.2 during the previous year. This is thought to be Ross Turner, the firm’s founder.
Pay for rank and file staff: N/A