Hedge Fund Compensation Trends Revealed in the 2013 Report

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Average bonus climbs 31%, contributes to double-digit increase in overall pay

20113 Hedge Fund Compensation

Employees of the best-performing funds took home average bonuses of just over $200,000.

Hedge fund professionals are enjoying fat wallets once again. Their average cash compensation rose 15 percent to $314,000, according to the 2013 Hedge Fund Compensation Report. In addition to analyzing the salaries and bonuses of hundreds of hedge fund pros, the yearly report also examines the impact of fund performance and size on earnings, hiring trends, and job satisfaction.

Fueled by strong fund performance, bonuses contributed strongly to the year-over-year increase in total pay in 2012. The average hedge fund bonus surged by 31 percent, while the mean base salary edged up 4 percent.

“This year, we discovered a significant correlation between fund profitability and bonus size,” said David Kochanek, publisher of 2013HedgeFundCompensationReport.com. “Employees of the best-performing funds took home average bonuses of just over $200,000.”

Kochanek continued, “Given similar performance, we expect 2013 bonuses to rise even further as many funds will reach their high-water mark.”

Firm size had little bearing on compensation, with similar earnings reported by employees from the smaller funds as those from firms with $1 billion under management.

Hiring trends remained roughly on par with the previous year, with 24 percent of firms reporting hiring within research departments, 20 percent adding to operations, and 12 percent seeking to bolster legal departments.

The full report, available for download, contains more than 40 detailed charts and graphs. It provides comprehensive data to help hedge fund professionals set goals and negotiate compensation packages, and assist firms seeking to establish pay benchmarks.

About The 2013 Hedge Fund Compensation Report

The 2013 Hedge Fund Compensation Report is based on compensation data collected directly from hundreds of portfolio managers and employees from firms, both large and small, during October and November 2012. The full report can be found at HedgeFundCompensationReport.com

The Report has grown to become the most comprehensive benchmark for hedge fund compensation practices in the industry. Respondents participating over the years represent a good cross section of the industry including small firms as well as some of the most recognized hedge fund firms, including: Apollo Global Management, Bank of America Merrill Lynch, Barclays, Blackwater Capital, Citi, Deutsche Bank, Gottex Fund Management, HSBC, JP Morgan Chase & Co., Man Investments, RBC, Silver Point Capital, UBP Asset Management, UBS and Wells Fargo Alternative Strategies.

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