Hedge fund compensation rises, according to Glocap report
Hedge fund compensation increased in 2012 despite the challenging market environment, according to the Glocap 2013 Hedge Fund Compensation Report.
Portfolio managers and traders enjoyed a rise in compensation this year with performance and fund size being primary drivers for these gains.
Portfolio manager compensation increases ranged from flat to 15%, with a portfolio manager at a mid-sized hedge fund generating average returns receiving approximately $1.3 million. Portfolio managers at top performing and larger hedge funds earned more than double this.
Traders’ compensation ranged from a 1.5% decline to 14% increase in compensation with senior traders at large firms with mid-range performance earning around $500,000. Competition, however, limited compensation at entry and mid-level analyst positions.
Risk management, marketing, CFO, COO, legal, accounting and technology personnel all experienced gains in compensation.
Despite this, few managers are hiring aggressively. “An overall cautious hiring environment has persisted with funds remaining wary of aggressive expansion and rather focusing on selective, essential hiring and very limited speculative and opportunistic expansion. We expect this pattern to continue in 2013," said Adam Zoia, CEO of Glocap.
According to Hedge Fund Research, total industry capital stands at $2.19 trillion while the HFRI Fund Weighted Composite Index posted a gain of 4.8% in the first three quarters of the year.