Opalesque Industry Update - Compensation in the asset management industry is rebounding after two difficult years. The significant levels of asset depreciation and investor redemptions that persisted into 2009 have given way and U.S. investment management firms are showing signs of recovery in both overall company performance and compensation levels. Greenwich Associates and Johnson Associates, a New York-based compensation consulting firm, collaborated on a review of the relevant benchmark changes in asset management compensation amounts and structures from the start of the global market crisis through the remainder of 2010.
Hedge Funds · Compensation figures reported by study participants show that as markets imploded in 2007–2008, average total compensation for senior hedge fund fixed-income investment professionals declined more than 40%, only to rebound by about the same amount from 2008–2009. At $1.1 million, projected 2010 average total compensation for senior fixed-income professionals at hedge funds exceeds pre-crisis levels. · Average reported compensation for senior hedge fund equity professionals declined 44% from 2007–2008 and then fell another 15% from 2008–2009. Total compensation for these professionals is projected to increase by 8% in 2010 to $875,000. “Hedge fund equity professionals in 2010 are earning about half what they took home in the boom days of 2007 — and less than their counterparts at traditional asset management organizations,” says Greenwich Associates’ Director of Institutional Marketing Jennifer Litwin.
Traditional Management Firms · Average compensation levels among senior fixed-income professionals at traditional funds and advisors declined by about 5% from 2007–2008 and then jumped 53% from 2008–2009. Those levels are projected to increase approximately 10% to $525,000 in 2010. · Average compensation among senior equity professionals at traditional funds and advisors actually increased 34% from 2007–2008 and then held steady from 2008–2009. These levels are projected to increase 12% to $950,000 in 2010.
Softening Expectations for 2010
Pay Differential by Job Title
Mix of Pay (Cash Compensation)
Deferred Compensation (press release) kb |
Industry Updates
Projected 2010 average total compensation for senior fixed-income professionals at hedge funds exceeds pre-crisis levels - Greenwich Associates/Johnson Associates
Monday, November 15, 2010
|
|