The sense pervading the broader financial sector that this would be a difficult year for compensation appears to have spared the hedge fund industry. Half of this year’s respondents believe that their cash compensation would either stay the same or go up between 1 and 15 percent; only one in five believe it will actually decrease – which is about the same as what we reported last year.

Traders and senior associates saw the most substantial gains, while COO’s, partners, principals saw no gain or a decrease in total pay. Those differences are mostly from bonuses and are supported by fund performance.

As reported last year, guaranteed bonuses are far from the norm. Four out of five hedge fund employees have their entire bonus at risk. And some of the bonus at risk does not get rewarded in discretionary income. Fourteen percent of respondents reported having to invest some of their bonus back into the fund.

Some of the highlights from this year’s report include:

  • The annual average compensation for hedge fund professionals was $311,000 USD.
  • The average hedge fund employee reported their base pay went up and expected their bonuses to drop.
  • On average, funds that focused on an event-driven strategy had the best-paid employees.
  • MBAs surveyed expecting on average 26 percent more than non-MBAs and most of that difference came in the form of bonus payouts.
  • In general, the hedge fund job market remains tough but there are pockets of opportunity.
  • Most hedge fund employees are concerned about job security. Their concerns are mainly related to firm structure and market conditions.
  • Forty-four percent of hedge fund employees are happy with their compensation, up from 40 percent in 2010.