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Hedge fund pay explained in one helpful chart

If you want a portfolio management job in a hedge fund, you might be wondering what your pay will look like when you get one. Helpfully, therefore, Barclays has produced the following chart.

When you work in a hedge fund, you'll either paid according to your net P&L, or to the percentage of performance fees earned on your P&L. This will then be altered according to the amount of capital allocated to you. The resulting metric will then be multiplied by your gross returns above a pre-specified level (the hurdle rate). After that, the fund will deduct all the costs associated with your performance. You, the portfolio manager, will get to keep whatever's left.

Simple.

Hedge fund pay

Source: Barclays

Photo credit: :Franklin Friday by tobym is licensed under CC BY 2.0.

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AUTHORSarah Butcher Global Editor

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