Hedge fund managers are celebrating big pay increases -- here's how much you can expect to earn working at one

Paramount Pictures
  • The median money manager was paid $US350,000 in 2017, according to a survey by SumZero, an online community for investors.
  • That’s up from $US300,000 in 2016, and marks the largest pay increase since 2012.

Those in the investment community got a hefty raise in 2017.

The median annual compensation for money managers in 2017 was just under $US350,000, up from just under $US300,000 in 2016, according to research done by SumZero, an online community for investors. SumZero surveyed roughly 5,500 people at 1,400 hundred different firms. Roughly half of the $US350,000 in median annual compensation is base salary, with the other half being mostly cash bonuses on realised gains.

That’s a lot of money, but it could be less than you were expecting. Most people perceive hedge funds as big multi-billion dollar money-making-machines, but thousands exist, many of which are small and obscure. And the biggest names in the hedge fund business are typically less likely to share their compensation.

Still, compensation has increased by a wide margin, and it could have increased by more, according to SumZero researcher Luke Schiefelbein. He said that pay increases were smaller than they could have been because, although the overall stock market yielded a roughly 20% return in 2017, many hedge funds have tried to protect themselves against a market correction. Indeed, hedge funds saw an average total return of only 10.48% in 2017, according to the Barclays Hedge Fund Index.

Total AUM for hedge funds increased 3.3% in 2017 to $US3.211 trillion, according to Hedge Fund Research.


Fund manager pay jumped in 2017


The pay was typically highest for those working at big funds.

SumZeroAnnual Pay By AUM

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.