Hedge fund employees expect their total average annual compensation in 2013 to be $330,000, up 16% from the prior year, according to the results of a survey of hedge fund managers conducted in October and November by Benchmark Compensation.
The average 2013 base salary was up only 4% over 2012, but strong hedge fund performance pushed performance-based bonuses an average of 30% higher than in the prior year.
More specifically, survey respondents' expected bonus by fund performance tiers were:
- negative returns, $43,000;
- flat returns, $84,000;
- 1% to 9% returns, $146,000;
- 10% to 24% returns, $210,000;
- returns 25% or higher, $232,000.
Despite good performance and healthy compensation in 2013, the vast majority of hedge fund respondents said their firms are not in a hiring mode, at least for non-investment functions. The report noted that only 25% of firms indicated that they are hiring more personnel this year for research; investor relations, 15%; operations, 14%; legal, 14%; risk management, 12%; and due diligence, 7%.
Finally, despite the hedge fund industry's reputation for copious overtime and aggressive company cultures, the Benchmark Compensation study found that in 2013, nearly three-quarters (72%) of respondents said their work-personal life balance was average or above average. About 11% of those surveyed said the balance is excellent, while 2% said it is poor and 15% said it is below average.
A separate study by Emolument.com, a compensation benchmarking firm, found that London-based private equity and venture capital employees earn a higher average annual compensation than do their hedge fund counterparts at all levels.
At the analyst level, the average 2013 total compensation in PE/VC firms was $128,000, compared to $92,000 for hedge fund personnel, Emolument's study said.
For other staff levels:
- associate VC/PE, $205,000; HF, $168,000;
- vice president VC/PE, $406,000; HF, $325,000;
- director VC/PE, $441,000; HF, $330,000.