2024 Hedge Fund Review – Salary and Compensation Survey

Following a very buoyant 2022 and 2023, it’s fair to say that recruiting in our specialist recruitment market in 2024 has been quite vanilla and certainly less aggressive. 2024 has seen the large funds become bigger, and many smaller funds decreasing in size, even closing, and whilst sending shockwaves through the industry some illustrious and prominent leaders of funds have announced retirements from the industry altogether. Many companies have been asked by their COO to make good of the staff they have already, and to do what they can to become scalable with the infrastructure they already have, and investing in technology and automation to achieve said growth. Raising assets has become harder and certainly more competitive, and with a long list of compliance to launch a new fund, and how stringent this process is now, we have noticed that there is has been a distinct lack of hedge fund start-ups. There has been a distinct rise in the amount of Family Office or Wealth Management style firms we have partnered with, and whilst there have been a few “pod” spin offs coming to market this year, who all remain positive following their launches, the obvious knock-on effect is a lack of hiring at the senior (COO and Head of Ops) level for the start-ups, and that merry-go-round has yet to kick off in 2024. We have in a few instances where Senior roles have been rewarded via promotion internally, instead of coming to market looking for fresh ideas. Even the Prime Brokerage contacts we speak to have confirmed that they are being asked less to help them launch when offering a favourable COO as part of the deal. CassonX are fortunate enough to say that we have been flat in terms of the number of senior roles when comparing year on year, this has been subsided by filling International roles in Monaco, Luxembourg, Dubai, and Abu Dhabi, using the extensive network we have in the UK and negotiating lucrative relocation packages for all of them.

In a year where the US and the UK have political unrest due to the elections and changes of leaders and parties, including the subsequent fresh challenges to the financial landscape, it’s fair to say that a lot of businesses have been waiting for the eventuality, instead of speculating on the outcome. What has been obvious is a lot of single strategy mangers have had to diversify and become more Macro in their approach, to not only keep their investors on their books but to also offer diversity and hedging services to their fund in this volatile climate. We have seen many major events in the Fixed Income world, with FX and Rates dramatically fluctuating all year, and even some major countries like Japan showing economic issues, the first time in many years. There is no hiding that the Private Credit and Commodities markets have seen exponential growth and forced hiring needs, but with regulations in Crypto and Blockchain becoming favourable for the professional investment world, we have seen a huge demand for candidates who understand the mechanics of different coins, as this becomes more popular. Whilst we have seen those who trade in the Primary and Secondary loan markets seeing good solid growth showcasing solid returns, those with Event Driven and Arbitrage strategies have been quite flat, certainly reflective of a lack of mergers, acquisitions, and IPO’s in the last 18months. Anything related to Equities, in particular Long/Short strategy funds, have suffered, we have lost some prestigious names from our market consequently and especially as the Debt world remains more prominent. It is fair to say that in 2024 those with a bond-book-basis have performed better than those without.

Most businesses still try to hire directly through their own networks, and rightly so, but given so many Operations or Middle Office staff have found new employment in the last few years, this has forced many institutions to reach out to their trusted suppliers to attract relevant profiles and advertising has not yielded the results which was intended. This is very relevant when considering those who want to advertise on Linked In, who are now realising just how many irrelevant profiles apply, and just how time consuming it is going through them all and replying to each one regardless how successful their interest is. With many companies now realising that Linked In doesn’t necessary attract the best or most suitable profiles for their hiring needs, and that they are “fishing in the same pond” as all their competitors and more, this now makes partnering with your trusted recruitment specialist even more valuable. In fact, many people are getting fed up of Linked In and not as active on it anymore due to the relentless unconciliated approaches they receive.

However, this does not mean that clients expectations in search of a perfect CV have not yielded. In fact, it has become harder to convince hiring managers to meet candidates, as they want more boxes ticked from a CV to justify the hire and signoff. Whilst strong academics will always remain prominent in the Alternatives sector, it is now very realistic to expect candidates to have programming skills with advanced Excel or VBA almost an essential requirement with every job brief. Many companies (especially those which offer Algorithmic or Systematic strategies) are now asking for candidates with Python, R or SQL type programming skills, as they look to enhance and support their automations, without enduring further expensive resources in their Dev Ops or Quant teams. An appreciation for Data is now becoming very useful in Operations hiring, especially those who can manipulate large data sets as part of their role, leading to an appetite for Controls or Risk Mitigation being key topics of interview questions during the process.  We have seen a surge in Treasury type recruitment, where many roles which cover cash management / funding / liquidity, collateral, or margin management type responsibilities – companies are realising that if they have someone who can optimise their cash positions well, utilising their long balances, can generate further returns and this gives opportunity to Operations and Middle Office teams to achieve this too. Artificial Intelligence (AI) is a very hot topic now. As we see Banks now using AI for customer servicing type roles, in fact lots of companies are using Bots to answer your questions on websites, AI is now the main topic in most of the events we have attended. How AI can be used in Operations and Middle Office is becoming quite creative, further enhancing the need for strong technical skills.

Navigating the post-Brexit world still holds some turbulence for some companies, and up until recently with interest rates continuously increasing and cost of living so high, this has undoubtably forced salaries up. Not forgetting that there has been so much hiring in the previous few years that higher salaries have already been paid to attract them, and an incentive needs to be on offer. This means that all levels of experienced hedge fund candidates now come at premium to attract them away, sometimes to unfathomable levels for their experience, but such is the demand for hiring superlative talent that offers relevant industry and strategy / asset class exposure. Many businesses are returning to a hiring strategy that reminds us of 2007 and 2008, where hedge funds were more up and coming, and businesses are looking to hire talent from Prime Broker Middle Office teams or Long Only style Asset Managers to seek cost-effective solutions yet encouraging for a candidate to change sector. We are also seeing that opportunities for candidates who require sponsorship to work in Operations or Middle Office are also diminishing and being saved for those who work in other departments.

Can you believe that we still must remind many firms that no graduate schemes were run in 2020 and 2021, making the identification of a candidate with 3-4 years’ experience almost an impossible task, and when identified, many have already found new careers given the volumes of hiring at that level. With the continuous demand for candidates with under 3 years’ experience, it is obvious that those salaries and total remunerations have increased, making the very junior market lack value because demand is outstripping the supply. More details of these experiences can be found by reading this short blog: https://cassonx.com/the-difficulties-with-hiring-a-less-experienced-operations-or-middle-office-candidate-in-the-current-market/

The majority of firms we speak to want 2024 out of the way, for what is widely seen as reset year for the industry. 2025 is looking really positive in terms of hiring needs, with many firms already talking to us about hiring to support expansion and increase in trading volumes. Many businesses we are speaking to have increased their front offices, determined to drive revenues further, and the subsequent knock-on effect is to have a robust Middle Office and Operations function to support this. This is exactly where CassonX can thrive with your hiring requirements. Be prepared to note that for any process most candidates will have three months’ notice periods, even including the inexperienced staff, and we are also witnessing many more companies willing to buyout bonuses to attract the staff they want, of course with proof of their previously paid total compensations. Face-to-face interviews are very normal again, it is also expected that most Hedge Fund employees are in the office 4 or 5 days a week now, with hybrid working conditions starting to become a thing of the past in this sector. We are advising all candidates looking for work in this sector to make sure their CV details all the asset classes and strategies they have supported, to make sure that hiring managers can make an informed decision accordingly about transferable skills. During 2023 in particular, the introduction for more awareness to DE&I became very prominent, it is now expected that each shortlist of candidates that CassonX provides is considered as diverse as possible, giving equality to the hiring process and an inclusive decision based on merit.

We are delighted to let you know that CassonX has produced its annual salary and total compensation survey for the Hedge Fund sector and separates the detail via company size and type of role too. Should you wish to see a copy then please go to our contact page, click on Clients, select salary benchmarking and fill in your details accordingly – don’t forget to include your work email and contact number. This information is available to all those who have or thinking about hiring, and we will be happy to send you a copy via email, or even catch up over a coffee or lunch to discuss further. If you are a curious candidate wanting to see this information, please do let us know and we can arrange a separate conversation, as this data is designed for hiring managers and clients who are looking to benchmark their own teams.