Infovest21 Fund of Funds Compensation Survey: CIO tops large funds of funds compensation study at $1.3M

For funds of funds with more than $1 billion in assets, the Chief Investment Officer was the top paid position, who, on average, received total compensation of $1.3 million.

Director of Research and Chief Operating Officer had average total compensation between $600,000 and $999,999.

Director of Sales & Marketing and Chief Financial Officer had total compensations in the $400,000 to $499,000 range.

Senior Analyst and Operational Due Diligence had total compensation between $200,000 and $299,999.

The IT Director, Controller, Mid-Level Analyst, Client Services and Junior Analyst had total compensation between $100,000 and $199,999.

Lois Peltz, president of Infovest21, observed, "In comparing 2010 results with 2009 results, the trend was mixed. Top management – Chief Investment Officer, Chief Financial Officer and Chief Operating Officer - received a higher total compensation package than in 2009. The Junior Analyst, Director of Research and Controller also had higher compensation in 2010 compared with 2009."

The Senior and Mid-Level Analysts, Director of Sales & Marketing and Director of Investor Relations had lower compensation in 2010 than in 2009.

Wide diversions exist in compensation particularly at the highest levels. And as occurred in the prior two years, some of the funds of funds’ personnel did not receive either a bonus or a salary.

Profile of Respondents
The average fund of funds in the survey had $4.1 billion in assets, 53 employees and was up 5.9% for the first half of the year. Over 80% of the respondents were stand-alone organizations.

Other highlights

• 54% of the funds of funds in the 2010 sample were above their high water mark compared with only 12% in 2009.

• Whereas 30% of the funds of funds contained costs in 2009, two-thirds did not in 2010.

• Over 50% said there had been no change in headcount in 2010 compared with 36% in 2009.

• Performance and asset flow were cited as the two largest factors affecting compensation as cited by 23% and 38% respectively.

• Funds of funds have more stable expectations on changes in next year’s compensation package. Almost 70% do not expect any change in the compensation package.

Methodology
Infovest21 conducted its ninth annual compensation survey for $1B+ funds of funds during October, November and December 2010. In-depth interviews were conducted by phone.

The results are based on data from 25 separate funds of funds management firms with assets over $1 billion. In calculating the statistics throughout the survey, we include only those respondents who provided concrete compensation data with dollar figures.

For the large funds of funds (over $1 billion), 23 executive and back office positions were examined -

Top management
Chief Executive Officer
Chief Investment Officer
Chief Financial Officer
Chief Operating Officer
Chief Risk Officer

Investment
Portfolio Manager
Assistant Portfolio Manager
Senior Analyst
Mid-Level Analyst
Junior Analyst
Director of Research
Operational Due Diligence

Sales and Marketing
Director of Sales & Marketing
Director of Investor Relations
Client Services

Legal/Compliance
General Counsel
Compliance Director/Manager
Operational Due Diligence

Financial
Fund Accountant
Controller
Assistant Controller

Operations
Director of Operations
IT Director

For Chief Executive Officer, Chief Risk Officer, Portfolio Manager, Assistant Portfolio Manager, Assistant Portfolio Manager, Director of Investor Relations, General Counsel, Compliance Director, Assistant Controller, Fund Accountant and Director of Operations, not enough data points were provided for 2010 base salary or bonus to allow calculation of 2010 total compensation.

Separate surveys were conducted and results analyzed for hedge fund managers with assets above $1 billion, hedge funds with assets below $1 billion, and funds of funds with assets below $1 billion.