Here are the salaries and bonuses at hedge funds in the U.S.

Hedge fund performance has been disappointing and many are under pressure to cut fees, but if you assume that means hedge fund compensation is down this year, then you’d be wrong. In fact, pay is up for star performers this year.

“You read a lot about hedge funds having a bad year, but the industry has actually grown, with $100bn in gains versus $50bn in withdrawals through the end of Q3, which is actually a $50bn net gain,” said Adam Zoia, the CEO of recruiters Glocap, which has just published its 2017 Hedge Fund Compensation Report. “It’s still a massive industry with a massive amount of fee income.”

The report found that the bonuses of portfolio managers at top-performing will be up as much as 11%, whereas the bonuses for PMs at poorly performing funds will shrink by as much as 7%.

This means that if you're a portfolio manager working in a middle performing hedge fund with more than $4bn in AUM, which has returned just 1% this year, you'll still end up with a bonus of $1.9m on average. For a top performing fund, this figure rises to $6.5m.

Even though the average hedge fund has earned meagre returns in the low single digits over the first three quarters of the year, PMs at the best performing funds will take home 6.6 times as much as those at firms in the bottom third in terms of performance, per the report.

“The compensation of senior analysts and portfolio managers are highly correlated with fund performance – the further up the food chain you get, the more exposure you get,” Zoia said. “Compensation is positively correlated with fund size and fund performance regardless of size, so there are a few variables to consider when comparing comp at a big fund that performs poorly versus a small firm that performs well.

“Was the particular firm in question subject to a high water mark on some or all of their money? How much money is subject to a high water mark?” he said. “The fund manager is only paid on a portion of the fees on returns above the high water mark.”

The bottom line? For senior investment professionals, it’s all about the performance of your fund, but size matters too.

“You’re better off being at a bigger fund, because for any given level of performance you’ll be paid more on average,” Zoia said. “For any given level of performance, you’ll make a lot more money at a larger fund than a smaller fund with comparable performance.”