Hedge Fund Managers Will Get Larger Bonuses in 2016

Hedge Fund Managers Will Get Larger Bonuses in 2016 Many hedge fund managers have reason to cheer even as their investors grouse about lackluster returns; they are on track to reap a much larger payday for 2016 than for 2015. “There have been a lot of reports about hedge fund compensation being down this year but that is misleading,” said Adam Zoia, chief executive officer of Glocap, the largest investment management search firm which tracks hiring and pay in the hedge fund industry. “The headline here is that pay is up for star performers this year.” And the jump is expected to be large, according to the 2017 Glocap Hedge Fund Compensation Report which was reviewed by Reuters. Video Player is loading.Play VideoPlayMuteCurrent Time  0:00/Duration  0:00Loaded: 0%Stream Type  LIVESeek to live, currently playing liveLIVERemaining Time  -0:00  SharePlayback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedAudio TrackFullscreenThis is a modal window. This video is either unavailable or not supported in this browser Error Code: MEDIA_ERR_SRC_NOT_SUPPORTED Technical details : No compatible source was found for this media. Session ID: 2019-12-30:26017d5363f83cc08771cb0b Player Element ID: jumpstart_video_1 OK Close Modal DialogBeginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.PlayMuteCurrent Time  0:00/Duration  0:00Loaded: 0%Stream Type  LIVESeek to live, currently playing liveLIVERemaining Time  -0:00  Playback Rate1xFullscreenClose Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button. At top performing funds, investment managers’ bonuses are on track to be up as much as 11 percent. Portfolio managers at poorly performing funds will see bonuses shrink by as much as 7 percent, the report said. Hedge funds became famous more than a decade ago for delivering eye-popping returns, but more recently the industry as been criticized for its high fees and low returns, prompting many pension funds to pull money out. Even as the average hedge fund is earning returns only in the low single digits, portfolio managers at the best performing funds are likely to earn 6.6 times more than those at the industry laggards, the data from CompIQ show. The strong jump in compensation is being fueled by a wider spread between returns this year. The top performing one-third of funds are boasting gains of roughly 15 percent. The bottom one third are nursing average losses of 7 percent. A year ago the top third was up only about 4.2 percent while the bottom third was off about 4.2 percent. “Last year there was a much tighter range,” Zoia said. Hedge funds have long paid extremely well with the 25 best-paid hedge fund managers earning $13 billion last year, Institutional Investor’s Alpha’s 15th annual ranking of the industry’s highest-earning managers show. With more sluggish returns this year the conventional wisdom was that pay would shrink at a time some firms have laid off staff and trimmed spending on employees to save. The data show this is not true. Since hedge funds charge a management fee and take a portion of gains, analysts say there is still enough to pay and that firms will have to pay up to keep their best staff. “The feeling in the industry is that it is hard enough to make money, so if you make me money you will be very well taken care of,” Zoia said. (Reporting by S