Latest Hedge Fund Compensation Report Now Available

December 22, 2012

In the hedge fund game, bigger is not necessarily better.

The annual hedge fund industry compensation report is based on data collected directly from hundreds of hedge fund managers and employees. The report has grown to become the most comprehensive benchmarkHedge Fund Compensation for hedge fund compensation practices in the industry. For more information, watch the video summary of the hedge fund report.

The size of the most recent fund raised in the typical firm represented in this year’s Hedge Fund Compensation Report is less than $1 billion. While the industry talks about moving capital to big funds, it is the funds with smaller amouts of assets under management that are performing well.

According to the Report, nearly 75 percent report positive returns for their funds in 2012. When, in 2011, 16 percent of professionals reported returns above 10 percent, in 2012 that number jumped significantly to 30 percent. The number expecting their funds to be down fell from 22 percent to 8 percent. Very few reported negative fund performance above 10 percent.

High performing funds pay big bonuses… even if there is not a direct correlation.

According to the report, industry professionals expected increases in both base salary and year-end bonuses. The average reported cash compensation for 2012 was $314,000 and, again this year, bonuses played a big role in the paychecks of these professionals.

In fact, pay was up 15 percent over 2011, yet salaries increased only 4 percent. BUT bonuses increased by 31 percent — likely a by product of these funds raking in big returns for their investors.

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