Morgan McKinley’s recent survey on hedge funds puts the maximum salary for portfolio managers in London at £130k.
A look at the most recent annual reports (which are not very recent) for established London hedge funds like Bluecrest, Brevan Howard, Capula and Paulson Europe reveals that compensation is generally a lot higher than £130k, but is mostly falling.
At Bluecrest, average compensation per ‘member’ was £798k for the 14 months ending December 2010. At Paulson Europe, the average member of staff earned £764k and the average member earned £6.6m for the 12 months ending 31st March 2011. At Brevan Howard, Alan Howard earned £64.8m for the same period, whilst another 4 members appeared to share £128m between them. At Capula, £98m was shared between 18 members, some of which were organizations, and the highest paid member earned £26m. Notably, however, pay is falling and may well fall further. Alan Howard, for example, earned £64.8m for the 12 months to March 31st 2011 but £267m for the 12 months previously. Admittedly, this may not be the cause of too much hardship.
It is worth noting as well that deferrals are already very common in hedge funds in London but salaries haven’t risen to match investment banks.