Pay for hedge fund portfolio managers vs. long-only PMs in London
If you’re a stock picker in London, you might feel like you’ve been squeezed recently. Hiring has been slow, teams are being rebuilt more than expanded, and juniors have fewer career opportunities than they, or you, can remember.
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Data from recruitment consultancy Octavius Finance suggests that your fears are correct - but there is still money to be made, if you know where to find it. A market update from the firm concerning pay for long-only equities professionals suggest that their pay can reach anywhere up to £600k ($800k) or more.
At this highest level, compensation is tied to the profit and loss (PnL) that professionals generate. Below it, total pay for long-only equity professionals is between £75k ($100k) and £300k ($400k), depending on seniority. “Compensation varies meaningfully by platform, fund performance, and individual contribution,” Octavius Finance said.
The most lucrative seats in long-only equity management are for European generalist and global generalist roles, Octavius Finance said. However, these seats have declined in number significantly in recent years, in part due to the increased popularity of passive investment strategies, which are increasingly squeezing the pie that stock pickers eat from. A PwC study from a few years ago suggested that the percentage of US equities being passively managed would rise from 44% in 2022 to 58% by 2030.
Equities professionals are aware of this, of course. There was “increased interest in switching sector coverage or moving into long/short equity strategies, alongside broader concerns around the continued growth of passive investing,” Octavius Finance said.
Pay for hedge fund portfolio managers (PMs) had the same scope. According to Octavius Finance in a market update slightly earlier in the year, a hedge fund professional with 10+ years of experience could expect to earn between £150k and £200k in fixed compensation, with a bonus of between 150% and 200% of base. The numbers suggest that this means compensation of up to £600k ($800k) in total compensation.
The numbers are higher at the very top of the tree, however. Hedge fund PMs are paid from their generated PnL. When we last checked, a large multi-strategy fund like Citadel paid its members (UK legal jargon for partners in a partnership) an average of $21m (£16m) each.
And, at Rokos Capital Management, one lucky member received £477m ($642m). But this was probably founder and CIO Chris Rokos himself. That’s how good the pay gets at the very top of the tree.
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