Executives at traditional asset management and alternative investment firms can expect to see bonuses increase by double digits from year-end 2020, according to a report from compensation consultant Johnson Associates.
For traditional asset management firms, Johnson Associates estimates increases should range from 10% to 15% and will be driven by assets under management reaching record highs, as well as by broad net inflows led by fixed-income and multiasset strategies, according to the report.
Remote work and a competitive talent market have led to higher turnover, which should also lead to higher incentive compensation, the report said.
In the alternative investment arena, hedge fund executive incentive funding will increase by 10% to 15% as well, due to positive flows paired with strong performance, and private equity incentive funding for megadeals will increase 15% to 20%, while smaller deals will see incentive funding increase 10% to 15%, thanks to soaring fundraising and healthy realizations, the report said.
The analysis is based on second quarter earnings results at 10 money management firms.