The average total compensation for all hedge fund investment personnel is expected to drop 8.7% to $522,000 compared to 2015, the results of an online survey of more than 500 hedge fund investment managers conducted in September by Odyssey Search Partners showed. Bonuses, on average, will be down 13.6% to $349,000 and base salaries will average up 3% to $173,000.
The most senior employee level — portfolio managers — expect their 2016 total compensation to fall a whopping 34.4% on average to $704,000, with a bonus decline of 44.4% and a 5.6% increase in base pay, from 2015.
Survey respondents at the level of senior analyst or portfolio manager with seven or more years of experience said they expect an average decline in total compensation of 13.5%, with their 2016 bonus down 19.7% to $473,000 and their base salary down 4.4% to $212,000.
Junior analysts are much more upbeat about their compensation packages. Those young analysts with experience of three years or less expect total compensation to rise 9.9% to $321,000 this year. Their average bonus expectation is an 11.6% jump to $183,000 and an increase in base salary of 7.8% to $138,000.
Odyssey's survey also found that at all seniority levels, hedge fund employees' bonus expectations are closely tied to their firm's ability throughout 2016 to bring in new net inflows.
There was a 37% difference between the average expected bonus of $394,000 for employees working for a firm that experienced inflows this year and the $288,000 average expected by investment managers at firms that had outflows. Hedge fund staffers who work at firms with flat assets expect a bonus on average of $341,000 in 2016.