Portfolio managers at hedge fund companies managing more than $4 billion can expect an 8% rise in total 2014 compensation — base salary plus performance bonus — compared to 2013, estimated Glocap Search, a money management recruiter.
The firm partnered with Hedge Fund Research to produce the 2015 Glocap Hedge Fund Compensation Report.
Holders of the following hedge fund positions can expect the following increases in 2014 compensation, compared to the prior year:
- director of risk management, 7%;
- chief technology officer and marketer with at least four years' experience, 6% each;
- senior trader and analyst at firms managing more than $4 billion, 5% each; and
- chief financial officer and chief operating officer at firms managing at least $1 billion, 4% each.
Glocap based its estimates of 2014 total compensation for hedge fund professionals on analysis of its own placements; conversations with hedge fund senior executives; discussion with candidates about the salary range they encountered during the interview process; and historic factors influencing the hedge fund industry, said Anthony Keizner, head of the firm's hedge fund practice.
Among the 2014 trends that buoyed salaries was the sheer size of total hedge fund assets: the industry hit a peak of $2.8 trillion on Sept. 30, Mr. Keizner said. He added that “in conversation, hedge fund executives expressed far stronger confidence about their prospects in 2014 compared to 2013, which favorably influenced compensation levels.”
Also, “top-quality candidates are receiving multiple employment offers, which is driving up base salary and incentive pay,” said Mr. Keizner, while startup hedge fund firms are “better capitalized than they've been in the past, closer to $200 million than $50 million, and can afford to pay more for higher quality candidates.”
The moderate increase in competition for great candidates, including from private equity and venture capital firms, has shortened the candidate evaluation time between an initial meeting and start date to three months from six months, Mr. Keizner said.