Fund managers to receive 5% year-end bonus boost

05 Nov, 2010

Hedge fund managers look set to enjoy a 5% year-end bonus, according to a new report.

The 2011 Glocap Hedge Fund Compensation Report by Hedge Fund Research (HFR) and Glocap Search, a recruitment firm specialising in the alternative investment industry, said this was the second consecutive year bonuses had increased.

These findings illustrate how well the industry has recovered from the downturn. The report said a chief operating officer, for example, at a top fund could receive a bonus of $800,000. A portfolio manager at a small fund, it added, could look to take home a $1.23 million bonus while a manager at one of the larger funds could receive a $4.85 million bonus.

Adam Zoia, chief executive officer at Glocap, said overall assets under management in the industry had recovered and more funds were above their high watermarks meaning the total income earned had jumped.

The report based its estimates for this year’s bonuses in part on fund performance through the first three quarters of 2010.

This comes as the HFRI Fund Weighted Composite Index saw gains of 3.37% in September 2010 – this was the most impressive increase seen since May 2009 and brought the cumulative index performance to the high watermark set in October 2007.

Ken Heinz, president of HFR, noted that the hedge fund industry had emerged from the performance drawdown that began three years ago.

The report analysed base salaries and bonuses of thousands of hedge fund professionals at hundreds of US hedge funds.