Havemeyer prices are dropping but how will the hedge funders afford it?

ZeroHedge says hedge fund salaries are in the toilet and headed down the drain.

Everyone knew it was going to happen just not when. The when is now, according to Jon Pierson president of recruiting company 10X partners as quoted by Hedge Fund Alert. Latest market data indicate that the base salaries for portfolio managers working for medium hedge funds in the $300-$500 million ballpark, have dropped by almost 50% from $300,000-$350,000 to $175,000-$200,000, and even veteran PMs are seeing their base cut.

Additionally, performance pay will be whacked too: while PMs may not make any money at all if their books or funds have lost money (great to know if you are raking in $$$ on those shorts while all your colleagues are perma bulls and about to scuttle your fund), their percentage of the fund’s performance fees (assuming you don’t have a Citadelesque 100% to climb before you hit your high water mark) will be cut drastically and much better performance will be needed to even get back to historical payoff levels. Lastly, if PM’s previously counted on getting 1% on the management-fee of the overall fund, this number will now be 0.50% and even 0.25% in most cases. Oh, and about those guarantees and signing bonuses… history.

(hat tip, Krazy Kat)

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One response to “Havemeyer prices are dropping but how will the hedge funders afford it?

  1. anonymous

    Darwinian business

    Those who are talented and produce competitive risk-adjusted returns (net of fees) mysteriously attract investors and are paid rather well

    A talented worker bee who feels underpaid can easily move to another HF that values his talent more…or start his own HF….mark-to-market talent, no?

    It’s a rather liquid talent market, and truly talented hedgies are always scarce given many early retirements in such a lucrative industry and a relatively fixed no. of smart kids entering industry every yr