Executive Summary
The Hedge Fund Search Digest Compensation Survey was designed to capture valuable compensation information directly from those involved in the hedge fund industry. We surveyed 232 industry players from more than 200 hedge fund firms, both large and small, such as: Credit Suisse, Vegasoul, Deutsche Bank, Nedgroup, BlueBay and Goldman Sachs. For several months our members could access our Compensation Comparison tool - giving them the opportunity to analyze the salary data in an ad hoc manner. Here we summarize the results of the survey to include some of the earnings data and much more. The results tell an interesting story.
We found that 76% of respondents are dissatisfied with their current compensation package and there is little loyalty to the firm. Most of the survey respondents are in senior roles, have over 10 years of work experience but less than 2 years with their current firms. Is it the fact that intelligent, well educated, hard charging "type A" personalities are never satisfied? Or could it be that the hedge fund industry really does have a problem simply due to the high demand for talent?
Although the purpose of the survey was not to find causes for high turnover, the fact that such an overwhelming percentage of respondents feel compensation needs to be improved might be what is sustaining the revolving door. Given generous vacation policies, high average total compensation ($250,000) and the fact that 76% expect to see raises this year, the dissatisfaction may be a function of expectations and perceived opportunity cost. There is still plenty of income opportunity out there; top hedge fund performers earn huge bonuses and make more than $1,000,000 a year.
At the analyst level, there is significant difference in cash compensation across the US. On average, analysts on the West coast are earning nearly 30% more than their brethren on the East coast.
Despite a sky high cost of living, it seems London is doing a good job keeping up with demand for talent. Better compensation packages and extra vacation time contribute to higher achievement of a good work and personal life balance.
MBA's are realizing the return on their investment by earning 33% more in cash compensation - most of which comes in the form of bonus. Despite this additional compensation, the MBA respondents are less satisfied with their compensation package than most. Could it be even higher earning expectations and a lack of an equity stake that is driving this discontent?
The firms included in the survey are performing well overall. Most are using a multi-strategy investment approach and over 50% said their fund is achieving good to excellent performance. There may be a window of opportunity here to attract the best talent.
The following survey results will be of interest to both industry insiders and those looking to break into the industry. In managing your Hedge fund career, just like in managing a fund, more information enables better decisions.