Alt Investments
Alt Investments Drive up Salaries in Asset Management
Total compensation for risk professionals in asset management in the US grew 15 per cent in 2005, according to a survey by Risk Talent Assoc...
Total compensation for risk professionals in asset management in the US grew 15 per cent in 2005, according to a survey by Risk Talent Associates, a risk management executive firm based in New York.
The study found that alternative investment firms (hedge funds and funds of funds) are the main drivers behind the high averages in asset management compensation in 2005. Compensation for senior-level positions at these firms often exceeds $1 million, propped up by substantial bonuses.
Alternative investment firms are offering more attractive compensation packages than traditional asset management firms across the board, the survey found.
“The survey confirms what we see in the marketplace – top firms value seasoned risk professionals,” said Michael Woodrow, president of Risk Talent.
“Asset managers, particularly in the alternative asset management space, desire top tier talent, and they are willing to pay for it. The entry point for a seasoned, but hands-on risk manager at an asset manager often hits $500,000 or more, which is markedly up from a few years ago.”
The survey also found that one-third of the respondents reported changing jobs within the last two years – and almost 70 per cent of them entered new jobs in alternative investments or companies providing both traditional asset management and alternative investments.
“We have seen particularly heavy activity in the first quarter of 2005 with our hedge fund and fund of funds clients. It appears that the coveted hedge fund investors – institutions – are critically reviewing alternative asset managers’ risk management capabilities prior to making a decision on a mandate,” said Mr Woodrow.
He added: “In order to attract the institutional investors, some hedge funds and funds of funds are setting the bar quite high by implementing sophisticated risk management programs, and hiring the staff capable to run and oversee them. We expect this trend to continue throughout 2005.”
