When do a fund manager's salary and bonus become figures it is important for an intermediary to know...
When do a fund manager's salary and bonus become figures it is important for an intermediary to know? With the large amount of job swapping going on among high-profile funds at the moment it looks as if it really would be in the investor's interest to know what some of those numbers are.
Hedge funds and specialist funds and boutiques are luring more and more managers away from unit trusts. A recent survey found that the minimum salary for a hedge fund manager is £500,000 and with performance fees available there is the potential for this to increase substantially.
And if individuals really can make a difference this is, after all, the premise of active fund management then surely investors have the right to know just how happy managers are in their job, financially and otherwise. It is not much fun to put a large amount of money into a fund with a quality manager only to find that individual decides to jump ship.
This leaves IFAs these days choosing funds with an eye to how happy the fund manager is relative to the group just look at the wary glances Jupiter has received over the past few months. Incentive packages in place when groups are being taken over are of importance to the IFA who has their client's money in a fund whose manager may leave.
Partnerships and Cazenove is looking to dissolve its are one way of knowing with some certainty that the fund manager is not going to leave. The management set-up at Artemis looks attractive because not only are the funds small and growing fast but intermediaries are aware that the fund managers themselves care about how well the fund progresses. SG is another example of this and it is growing funds under management rapidly.
The need to know seems especially to be the case with specialist funds, precisely because there is not a large pool of managers that fund groups can pick from.
The events at Henderson are a case in point. The departure of Brian Ashford-Russell, Tim Woolley and co left a very bare cupboard indeed when it came to tech expertise.
While this supply/demand imbalance lasts in the market it is the end investor who no doubt has to pick up the cost of the salaries. Fair enough if the returns are extraordinarily high but as the fall in tech stocks this year has shown, what goes up can go down, and who wants to be paying possibly inflated fees for the privilege of underperforming badly?
While no one likes to discuss what other people make, the competition, and sometimes the lack of competition, in the fund manager market at the moment is creating a situation in which this is becoming a crucial disclosure point.
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