Competition for hedge fund hiring remains strong, but compensation may not reflect 2020’s challenging, yet banner year

Hedge funds ended 2020 on solid footing — despite Covid-19 encouraging investment outflows. But for the players who managed to turn uncertainty into record activity, their compensation may not directly reflect their efforts. This insight is among others revealed in Options Group’s annual Global Buyside Report, with the theme of this year’s report focused on “Navigating Compensation Challenges and the Future of Work During Covid-19.” The Options Group 2020/2021 Buyside Report includes compensation ranges for firms that pay on a discretionary basis, and presents detailed portfolio manager compensation along with detailed examples of payout structures, costs incurred, and any bonus deferral levels.

“Compensation expectations must be tempered despite several areas seeing more aggressive hiring competition and demand,”

says Options Group Co-Chief Operating Officer Push Patel. 

That said, the outlook for buyside funds as an industry is strong. 

According to the report, in macro, the hunt for talent has never been higher. Funds that retooled or decreased headcount over the previous six years made significant hires following record performance in 2020. 

The competition for payouts has also ramped up significantly, with an eye not just on the headline payout number, but top-line versus bottom-line costs, accelerated payouts to account for deferred compensation, and geographical flexibility.

“Obviously, during the late first and second quarters of 2020, we were overwhelmed with fear from an investment standpoint, but by the year-end there was a boost in confidence based on the banner year experienced by many strategies and funds. The overall compensation sentiment is optimistic now that we’re in the first few weeks of 2021, however we must still manage expectations that banner years do not always reflect how compensation will be impacted at the single managers and discretionary pay-out shops,”

says Patel.

The report is available now, and was compiled based on data available between January 1 and December 15, 2020, gathered from internal consultant surveys, proprietary technology, and publicly available information. The report sets the foundation of buyside compensation programs moving forward, and as the hedge fund industry becomes more competitive than ever, it also serves as an invaluable retention tool. Wide-ranging in scope and scale, the Buyside Report embraces every aspect of the compensation equation and is a critical planning tool for all compensation decision makers.  

Key regional compensation and hiring trends this year include:

Investment Professionals:

  • Multi-Strategy
  • Global Macro
  • Long/Short Equity
  • Credit
  • Systematic Trading
  • Electronic Trading
  • Structured Products
  • Asset Management & Long-only Investing
  • Private Equity

Non-Investment Professionals:

  • Distribution
  • Quantitative Research  
  • Data Science
  • Risk Management & Compliance
  • Information Technology

About Options Group
Founded in 1992, Options Group is a leading global talent acquisition and strategic consulting firm for the financial services and technology industry. Since 2000, it has maintained a local presence on five continents and has placed over 16,000 mid- to senior-level professionals in all areas of the financial services industry at a range of institutions. With more than 175 consultants and market intelligence professionals worldwide, Options Group has a thorough knowledge of key competencies in the financial industry and is at the cutting edge of global hiring services and compensation trends for securities, investment banking, hedge funds, asset management, and information technology.

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