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Americans Outearn European Portfolio Managers

Pay at European asset managers trails average compensation stateside, proprietary II data show.

  • By Amy Whyte

From All-Europe Buy-Side Compensation 2018 ranking

American portfolio managers far out-earned their European counterparts in 2017, according to Institutional Investors inaugural All-Europe Buy-Side Compensation Report.

The average mutual fund manager in Europe earned $429,289 in total compensation last year. By comparison, American portfolio managers reported 2017 income of $938,956, including base salaries and bonuses.

In contrast, portfolio managers at European wealth management firms earned $495,562 on average, slightly under the $527,163 made by their U.S. peers.

The All-Europe Buy-Side Compensation Report was based on a survey of roughly 300 portfolio managers and research analysts at hedge funds, wealth managers, and mutual funds managing European equities.

Respondents disclosed their 2017 compensation and made predictions about their total compensation for the next 24 months.

Overall, their expectations for future pay were steady-to-optimistic. Almost half of European mutual fund portfolio managers believed they would earn roughly the same amount for the next two years, while 39 percent predicted pay raises of between 10 and 25 percent. Only 13 percent expected bumps of 25 percent or more.

At wealth management firms, 51 percent projected little change to their income, while 40 percent anticipated compensation would increase by at least 10 percent. Nine percent said they thought their total pay would fall by more than 5 percent.

[II Deep Dive: Here’s What Hedge Fund Managers Will Earn This Year]

The disparity between America and Europe was not limited to portfolio managers. Research analysts at European mutual funds earned $299,971 in total average pay last year, falling short of the $382,907 typical for their U.S. counterparts.

Research analysts with European wealth managers likewise under-earned American peers, making $306,129 on average versus $324,423.

But these analysts were more confident about the future than their portfolio-manager colleagues. Nearly half of European mutual fund analysts predicted their total compensation would go up by between 10 percent and 25 percent over the next two years, while another 24 percent expected raises above 25 percent.

At wealth management firms, one in three predicted pay would increase from 10 percent and 25 percent, while 16 percent projected compensation would climb by more than a quarter. Only 4 percent thought salaries would fall by more than 5 percent.

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