Caxton Associate’s profits go from £15m to £111m, but pay stays flat

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2013 was a good year for Caxton Associate’s European operation. After posting profits of £14.7m for 2012, the firm eclipsed this the following year with profits of £111.4m – all available for division among the upper echelons of the macro hedge fund, according to accounts released this week.

The highest paid partner received a hefty £97.1m, up from £10.3m in 2012, of the £113.3m allocated to compensation, meaning the remaining six members divided up £16.2m, or an average of £2.7m per head.

This generosity doesn’t appear to have extended to rank and file employees, however. Staff costs were £14.1m, slightly down on the £14.2m handed out in 2012. It added two people to its fund management functions last year, and employs 32 people in the London office – up from 31 in the previous year. This still works out as an average of £440k per head, however.

Caxton’s statement pins the increase on “increased profit allocation related to incentive fees and assets under sub-management”. However, in a rare interview last year, Andrew Law, chairman and CEO of the firm, was more effusive about the “good year” for the firm that saw it bring in a $1bn trading gain from January to October.

“What I think we are seeing is the return of global macro,” he told the FT.

Caxton’s decision to keep compensation costs and headcount steady despite a rapid uptick in profits runs counter the tactics of number of large hedge funds last year. Winton Capital Management, for instance, reiterated its desire to keep on bolstering headcount despite a slump in profits in 2012, Bluecrest Capital Management has also been hiring despite reduced profits in 2013 and AKO Capital, the $9bn equity fund, dropped $60m in profits last year, but still hired.


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