Mid- and low-level employees at hedge fund companies likely will see larger increases in their total 2015 compensation than the senior portfolio managers, traders and management executives above them in the corporate structure.
Average base salaries rose about 9% in 2015 for entry-level analysts at larger hedge fund companies (managing more than $4 billion), said the 2016 Glocap Hedge Fund Compensation Report, which was jointly released Wednesday by recruiter Glocap Search and industry tracker Hedge Fund Research.
However, hedge fund analysts can expect bonuses averaging 5% lower than they were in 2014 due to “muted performance” this year, the report showed. Glocap researchers predict total 2015 compensation for junior analysts of $360,000.
Portfolio managers’ average base salary levels at midsized firms (managing between $500 million and $4 billion) were flat in 2015, and with lower performance-related bonuses, total compensation is expected to drop between 8% and 11% to $950,000. The report noted that portfolio managers at top-performing midsized firms can expect average total compensation to be about twice that of their peers at firms with lower returns.
Portfolio managers at firms managing more than $4 billion with average performance can expect an average decline of 10% in total compensation in 2015, according to report data.
“Compensation is driven by performance,” said Anthony Keizner, head of Glocap’s hedge fund recruitment practice, in a news release accompanying the report data.
Mr. Keizner noted total compensation will be lower in 2015 for managers of lower-returning hedge fund strategies, such as long/short equity, in a year-to-year comparison. However, investment teams managing market-neutral, global macro and event-driven strategies, which have turned in better returns this year, are “more optimistic about their compensation outlook,” he said.