Bigger is not necessarily better when it comes to personal compensation, according to the just-published 2008 Job Search Digest Hedge Fund Compensation Report.
The study reveals that funds in the $500 million to $1 billion range pay the best. Small funds struggle to build critical mass from a personnel point of view due to management fees not being high enough to cover a large base salary pool. But as funds increase in size to over $1 billion AUM, the average pay actually decreases.
When the fund performs well, employees are paid well – most of the time. The hedge funds reporting this year performed well with the majority reporting more than 10% return (and 15% reporting over 25% return). The highest average pay by fund performance did not correlate with this, however, as those firms reporting flat performance (that is, no return) had the highest average hedge fund pay.
You can read the executive summary of the Compensation Survey at JobSearchDigest.com