A hedge fund functions as a type of mutual fund. The typical mutual fund consists of a mix of stocks, bonds, currencies and other investments designed to reduce investment risk. In a hedge fund, the manager can take more chances. As a result, investors in these hedge funds are either very wealthy individuals or institutions, such as governments, insurance and other companies and education-based endowments, trusts and organizations.
In the United States, hedge fund managers have a mean pay of $148,000. The mean stands at C$122,573 ($98,306 USD) for those in Canada, 120,000 ($164,740 USD) in the United Kingdom, and AU$125,073 ($98,935 USD) in Australia.
Hedge fund managers have a mean pay of NZD$87,548 ($63,478 USD) in New Zealand, INR11,41,497 (INR1,141,497 in Western form) ($17,945 USD) in India, and R690,000 ($55,576 USD) in South Africa.
How Much Does a Hedge Fund Manager Make per Year by State?
|Hedge Fund Manager Salary||US||Canada||UK||Australia||New Zealand||India||South Africa|
Hedge Fund Manager Salary Influencing Factors
Performance, experience and the size of the hedge funds primarily drive earnings of hedge fund managers. Companies with larger funds and those that return higher rates to investors generally pay managers more than smaller, less successful ones. Usually, experience significantly spikes compensation for hedge fund managers in the late career stages, as these have demonstrated the knowledge and ability to yield high earnings and value for the funds.
Portfolio managers in Sydney make 13 percent more than the national mean of AU$125,073, while pay for those in Brisbane rises four percent above the national average. In Melbourne, portfolio manager pay dips 18 percent below the mean.
Earnings for portfolio managers in Auckland are ten percent more than the New Zealand national average of NZD$87,548. In Wellington, managers get four percent above average.
A portfolio manager based in Bangalore fetches an average 23 percent more than the nationwide average of INR11,41,497 in India. Those in Mumbai can expect 17 percent lower pay than the national mean.
How Much Does a Hedge Fund Manager Make in the US?
|Hedge Fund Manager Salary US||Per Year||Per Hour|
|Bonus||$9,744 to $489,357||$4.68|
|Total Pay||$70,234 to $607,948|
How Much Does a Hedge Fund Manager Make in Canada?
|Hedge Fund Manager Salary Canada||Per Year||Per Hour|
|Total Pay||C$61,000 to C$205,000|
How Much Does a Hedge Fund Manager Make in the UK?
|Hedge Fund Manager Salary UK||Per Year||Per Hour|
|Total Pay||£28,000 to £215,000|
How Much Does a Hedge Fund Manager Make in Australia?
|Hedge Fund Manager Salary Australia||Per Year||Per Hour|
|Total Pay||AU$58,295 to AU$182,111|
How Much Does a Hedge Fund Manager Make in New Zealand?
|Hedge Fund Manager Salary New Zealand||Per Year||Per Hour|
|Bonus||Up to NZD$31,808||Up to NZD$15.29|
|Total Pay||NZD$51,692 to NZD$164,449|
How Much Does a Hedge Fund Manager Make in India?
|Hedge Fund Manager Salary India||Per Year||Per Hour|
|Bonus||INR8,221 to INR714,900||INR3.95 to INR343.70|
|Total Pay||INR307,924 to INR3,236,683|
How Much Does a Hedge Fund Manager Make in South Africa?
|Hedge Fund Manager Salary South Africa||Per Year||Per Hour|
|Total Pay||R201,341 to R1,191,952|
PayScale reports that entry-level hedge fund managers in the United States earn 32 percent under the national mean of $148,000. Those with five up to 20 years of experience make two percent above the mean.
In Australia, entry-level portfolio managers make AU$76,000. This translates to 39 percent below the national average in Australia. Those with five to ten years of experience see earnings of AU$130,000. With ten to 20 years of experience, the pay reaches a mean of AU$152,000. Late-career pay averages AU$161,000.
PayScale reports that, with ten to 20 years of experience, portfolio managers in India make 81 percent more than the national average. Beginning ones have pay 46 percent below the Indian mean.
Compensation for hedge fund managers ultimately turns on the performance of the funds and the health of the industry. Pay and benefit packages incentivize strategies to maximize the number of investors and the returns to them.
A diminishing hedge fund industry could reduce the earnings for managers. According to Forbes magazine, managers and traders ranked in the top 25 made $10.9 billion in 2016 compared to $12 billion the previous year. This corresponds to an average return, less fees, of 5.6 percent on investments versus 12 percent returns on the Standard and Poor’s 500 stock market index.
Mutual fund and other investment companies generally run hedge funds and employ the managers of these funds. Some managers own their own firms. Nearly 12 percent of hedge fund managers and other “Insurance, Real Estate and Financial Brokerage Managers” are self-employed, according to Job Bank Canada.
Schedule & Working Hours
Typically, hedge fund managers log full-time hours. In the United States, nearly 30 percent work over 40 hours per week. Their work schedules consist of traditional weekday, daytime office hours. During these periods, the managers monitor markets, determine what and how much to place in the funds and contact clients. After hours, hedge fund managers may try to return calls or messages and research market, economic or industry conditions.
Hedge funds invest in international companies, securities, currencies and other assets. The markets in which managers make transactions operate globally. Depending on the location, hedge fund managers may take late night shifts to trade on markets in other time zones. Nights and especially weekends may find hedge fund managers meeting with potential clients to increase participants in the funds.
Bonuses & Benefits
Bonuses and other compensation packages for hedge fund managers rely heavily on performance of the manager and the funds being managed. As a result, profit-sharing, performance bonuses and commissions form major components of a hedge fund manager’s earnings.
According to PayScale, profit-sharing accounts for between $5,068 and $345,214 for hedge fund managers in the United States. Reported bonuses start at $9,744 and reach as high as $489,357. Portfolio managers in Australia earn on average AU$970 from profit sharing and between AU$596 and AU$44,385 in bonuses.
In India, portfolio managers claim bonuses ranging from INR8,221 to INR714,900 and earnings from profit-sharing at INR575,000. Commissions average INR120,000.
As for health benefits, 69 percent of hedge fund managers in the United States have medical coverage. One out of two enjoys dental coverage, while half receive vision care. In the United Kingdom, eight out of ten hedge fund managers have medical coverage and dental coverage. However, the coverage rate for dental amounts to only 20 percent.
In Australia, 12 percent of portfolio managers have medical insurance. Six percent enjoy dental care, while the coverage rate for vision stands at seven percent. For portfolio managers in New Zealand, the coverage rates for medical, dental and vision are 26 percent, five percent and 11 percent respectively.
PayScale reports an 84 percent medical coverage rate for portfolio managers in India, a 16 percent rate for dental and 21 percent for vision care. Hedge fund managers in South Africa have medical benefits at a tune of 22 percent. According to PayScale, no hedge fund managers in the country states having vision or dental benefits.
The U.S. Bureau of Labor Statistics projects an 11 percent growth in employment of financial analysts, which include hedge fund and other portfolio managers, in the United States through 2026. This means 32,100 more financial analysts.
According to Job Bank Canada, the field of “Insurance, Real Estate, and Financial Brokerage Managers,” which includes mutual and hedge fund managers, should have 10,200 job openings for 9,800 hunters for these positions by 2024.
Job Outlook Australia reports that the “Financial Investment Advisers and Managers” occupation numbered 51,800 in 2015. That figure should see a rise to 63,200 by 2020, with 25,000 to 50,000 positions being open during that period.
The size and strength of the mutual fund industry may shape job opportunities and prospects for aspiring fund managers. According to a 2016 Deloitte report, the mutual fund market in India represented six to seven percent of the country’s gross national product (GNP). While this suggests room for growth, it also hints at fewer job opportunities in the more immediate time scope. Further, hedge funds face taxes in India of one third of income, while mutual funds and other investments held for a year or more are not taxed. This treatment also leads to less hedge fund activity in India relative to other investment vehicles. In South Africa, the “Assets Under Management” industry contributes $33 to every $100 of GNP.
Hedge fund manager salaries on average stay somewhat below the large, news-making earnings of top investors. However, pay still proves healthy and becomes stronger with performance and experience. Opportunities for hedge fund managers to find work improve with experience and the health of the industry and economy where the managers operate and from where they draw investors.