Nothing like a mediocre year to make things even worse for the hedge fund industry – like thinning out the ranks of a field that many say is suffering from a shortage of talent to invest all those newfound billions in inflows. If headhunters got it right, there may be an exodus of investment bankers-turned-hedge-fund managers when the pastures of green they envisioned fail to materialize. Financial Times says top investment bankers are poised to see a 30% surge in their year-end pay packages, thanks to record mergers & acquisition activity, robust stock markets and a whole of debt trading going on. According to FT, European heads of M&A and can expect pay in the $8 million to $10 million range, while global heads of credit derivatives may see $4.5 million and M&A managing directors may receive $1 million to $2 million. Sitting on the sidelines, looking on, are those former bankers who decided to seek their fortune in hedge funds. Alas, those hedge fund managers who used to be bankers, may see zilch, as their pay package depends on performance fees, a pipe dream in what for many has been a down year. “Some hedge fund managers will be lucky to pick up a performance bonus at all this year, with many just sharing the management fee,” headhunter Matthew Obsorne of Armstrong International told FT.
‘Bad’ Year May Thin Hedge Fund Ranks
Nothing like a mediocre year to make things even worse for the hedge fund industry – like thinning out the ranks of a field that many say is suffering from a shortage of talent to invest all those newfound billions in inflows.
November 16, 2006
Nothing like a mediocre year to make things even worse for the hedge fund industry – like thinning out the ranks of a field that many say is suffering from a shortage of talent to invest all those newfound billions in inflows. If headhunters got it right, there may be an exodus of investment bankers-turned-hedge-fund managers when the pastures of green they envisioned fail to materialize. Financial Times says top investment bankers are poised to see a 30% surge in their year-end pay packages, thanks to record mergers & acquisition activity, robust stock markets and a whole of debt trading going on. According to FT, European heads of M&A and can expect pay in the $8 million to $10 million range, while global heads of credit derivatives may see $4.5 million and M&A managing directors may receive $1 million to $2 million. Sitting on the sidelines, looking on, are those former bankers who decided to seek their fortune in hedge funds. Alas, those hedge fund managers who used to be bankers, may see zilch, as their pay package depends on performance fees, a pipe dream in what for many has been a down year. “Some hedge fund managers will be lucky to pick up a performance bonus at all this year, with many just sharing the management fee,” headhunter Matthew Obsorne of Armstrong International told FT.
