The transatlantic divide in hedge fund pay

You’re a trader in an investment bank, desperate for your ticket to the buy-side in order to (supposedly) make your millions. Here’s the thing – if you’re in London, you’re in for a disappointment. If you’re in the U.S., you’re laughing.

There’s a transatlantic divide in size in the hedge fund industry, with recent research by Preqin suggesting that London is dwarfed by the hefty $1.024 trillion hedge fund industry in the U.S. But this principal applies to pay.

Bonuses for hedge fund managers in London have more than halved since 2012, suggest figures from salary benchmarking website Emolument.com, from £135k ($210k) to £53k ($82.6k) this year. Average base salaries were £120k ($187k) – pretty much on a par with previous years – meaning total comp was £173k ($269k).

These sorts of packages are, of course, still high but they’re unlikely to prompt envy from investment banking traders and pail in comparison to the packages offered in the U.S.

In a best-case scenario, bonuses for hedge fund professionals will be up by 5%, according to figures from Johnson Associates, and they’ll be flat at worst.

Figures from headhunters Glocap suggest that average salaries for portfolio managers in US hedge funds come in at $200-250k, with a bonus of $600k-1.25m on top. This is more like it.

Emolument tells us that entry level salaries for hedge fund professionals average at £44k ($68k, down from £49k in 2013), with a bonus of £12k ($18.7k).

Glocap’s figures again suggest that you should really work for a U.S. hedge fund. Base salaries for entry-level analysts are $90-125k, it says, with a bonus of $90-170k.