2015 Hedge Fund Compensation Report Reveals Lower Performance but Bigger Bonuses
Eighth annual report shows cash hedge fund compensation is up again this year based on bonuses that don't necessarily tie to fund performance.
SAN DIEGO, Jan. 8, 2015 /PRNewswire/ -- The 2015 Hedge Fund Compensation Report revealed that hedge fund professionals received increases in both base salary and year-end bonuses. The average reported cash compensation was up again in this year and came in at $368,000. Base salary grew by single digits this year, as bonuses grew by double digits again this year. The annual industry report is based on data collected directly from hedge fund managers and employees representing hundreds of investment firms.
Photo - http://photos.prnewswire.com/prnh/20150107/167664
Photo - http://photos.prnewswire.com/prnh/20150107/167663
Overall cash compensation was up 12 percent over last year. Average base compensation increased 7 percent, however, bonuses were 16 percent higher due to performance-based bonus structures.
This year we saw fund performance taper a bit. While 90 percent of last year's respondents indicated their fund had reported gains, this year that number was still a solid 79 percent. At the high end of performance, only 3 percent of funds this year earned in excess of 25 percent for their investors, while last year nearly 1 in 5 reported their funds hit this extraordinary level of performance.
"Again this year, solid fund performance results in significant bonuses," said David Kochanek, Publisher of HedgeFundCompensationReport.com. "The difference this year is we saw a reduction in the correlation between fund performance and bonus levels."
While those with even fund performance earned lower bonuses than their positively performing peers, those with positive performance earned nearly the same bonus levels.
For the third year in a row, 3 in 10 hedge fund employees expected 16 percent to 100 percent more cash compensation. "The change we saw was in the big percentage increase in the number of hedge fund professionals that expected their compensation to decrease," said Kochanek. "Last year only 10 percent expected a decrease. This year that number jumped to 18 percent."
Hiring plans for 2015 have increased across the board. In every single area these professional reported increased hiring activity. It is not all good news. "On the other side, we saw an increase in the number reporting reductions in headcount as well."
About The Report
The 2015 Hedge Fund Compensation Report is based on compensation data collected directly from hundreds of portfolio managers and employees during October and November 2014. The full report is available for download 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, BlackRock, Bridgewater Associates, Citigroup, Credit Suisse, Deutsche Bank, Gottex Fund Management, HSBC, JP Morgan Chase & Co., INTL FCStone, LCF Rothschild, Man Investments, Och Ziff Capital, RBC, Silver Point Capital, UBP Asset Management, UBS and Wells Fargo Alternative Strategies.
About Benchmark Compensation
The Hedge Fund Compensation Report is published by Benchmark Compensation. Annually, the firm collects compensation data directly from hundreds of hedge fund managers, principals and employees from firms both large and small. The firm also provides compensation consulting services for firms looking for customized benchmark data analysis.
For more information contact
David Kochanek, publisher
Tel: 760-634-4900.
Email
SOURCE Benchmark Compensation
Share this article