Nov 2011 - Five positions top $1M in large hedge fund manager compensation survey

In its just-released Tenth Annual Compensation Results for Hedge Fund Managers with Assets Over $1 Billion, Infovest21 found that five positions have an average total compensation of $1 million or more.

The Chief Executive Officer was the top position with an average total compensation of $1.96 million. The Chief Investment Officer came in second with an average $1.65 million total compensation package. Portfolio Manager, Chief Financial Officer and Director of Sales & Marketing followed with total compensation of $1.30 million, $1.18 million and $1.00 million respectively.

2011 vs 2010 comparison

Lois Peltz, president of Infovest21, commented, "In comparing 2011 and 2010 results, the trend was mixed. Chief Executive Officer, Chief Operating Officer and Portfolio Manager received, on average, a lower total compensation package in 2011 than in 2010 as did some of the mid and junior level positions e.g. Mid-Level Analyst, Junior Analyst and Assistant Controller.

However, some of the investment and infrastructural positions saw increases such as the Chief Financial Officer, Senior Analyst, General Counsel, Comptroller, Director of Operations and Operations/Mid Office.

The total compensation for the Director of Sales and Marketing in 2011 was about the same level as 2010.

Profile
The profile of the hedge fund manager who responded to the 2011 survey, had an average track record of 13.5 years and gained 3.4% during the first half of the year.

Other highlights

• Two-thirds were above their high water mark
• 76% had assets between $1-4.9 billion
• 85% of the respondents said their assets had increased over the past year
• 74% were stand-alone organizations
• 60% said they had increased their headcount while 7% said they reduced headcount.
• Going forward, 40% of the respondents expect the base salary will increase as a percentage of the total compensation package while 27% expect the base salary will decrease. 13% expect the equity component of the package to increase while 20% expect the equity component to decline.

As would be expected, the $1 billion+ hedge fund managers received higher compensation in all positions surveyed than those hedge fund managers with assets below $1 billion. The greatest differential was in the Chief Investment Officer position while the narrowest differential was in IT.

Methodology

The survey was conducted during September, October and November by phone or email.

23 executive and back office positions were included. Top management positions included Chief Executive Officer, Chief Investment Officer, Chief Financial Officer, Chief Operating Officer and Chief Risk Officer. Investment positions included Portfolio Manager, Senior Analyst, Mid-Level Analyst, Junior Analyst and Director of Research. Sales and marketing positions included Director of Sales and Marketing, Director of Investor Relations and Client Services. Legal/Compliance positions were General Counsel and Compliance Director/Manager while financial positions included Controller, Assistant Controller, and Fund Accountant. Director of Operations and Operations/Mid Office comprised the operations positions. Other positions included Head Trader, Trader and IT.

The results are based on data from 15 separate hedge fund management firms, all 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.

Separate surveys were conducted and results analyzed for those managers with assets over $1 billion and those with assets under $1 billion. Similar compensation results are available for funds of funds.




Infovest21 is an information provider to hedge fund investors, managers, funds of funds and service providers. Led by Lois Peltz, president, the firm provides news, research, surveys, white papers as well as organizes seminars and conferences.