20 of London’s top hedge funds – and what they pay
Everyone wants to work in a hedge fund.
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The benefits are pretty self-evident. While investment banks and private equity firms have had mixed fates, hedge funds have reached record high assets under management, and are hiring hugely on top of record high headcounts. The huge pay doesn’t hurt, either.
It isn’t all fun and games, however. Hedge funds do fail, especially small ones. A report from Goldman Sachs from a few years ago showed that half of hedge funds don’t survive in the long run, with the majority of failures packing up within the first three years of their existence. Market intelligence firm Hedge Fund Research estimated that 3,000 hedge funds have closed in the past five years, out of 27,000 or so in the world in total.
According to the Goldman report, it takes around $250m for a hedge fund to survive in this cruel world (although that number has probably gone up since then), and the bigger they get, the more likely they are to be multi-strategy funds, with varying teams (also known as pods), strategies, and risk and capital allocations.
That means, if you want a long and profitable career in the hedge fund industry, you want to work in a multi-strategy hedge fund. We’ve trawled through the UK register of private and public companies, companies house, to pull average compensation per head at 20 of the world’s biggest hedge funds in the city.
Bear in mind that these figures are for all staff, including secretaries, personal assistants, and the other administrative roles that significantly pull average figures down. Some accounts, such as Citadel's, are quite convoluted and involved multiple subsidiaries - we have an article on just what Citadel is paying here. Spoiler: it ranges from “high” to “very high” to “unfathomably high”.
Figures related to compensation for partners (legally known as "members"), are also included, but these are often corporate entities to which the lion's share of profits go to, rather than individual traders. The figures are also only for funds that have a base in the UK – although all major global hedge funds do.
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