Hedge Fund Manager Salary

A hedge fund manager is the one person, people entrust with their money, so that he may invest in the correct stocks, the correct way and earn a high return on investment. So, what is a hedge fund? Hedge funds are quite a lot like mutual funds - the main similarity being that the investor's money is spread over several high and low risk investments by a qualified fund manager. The difference between a hedge fund and a mutual fund is that there is more you can do with the former, since they are not regulated by the SEC. So, if you were to pick this as a career, what is the average salary you will earn? Here's an article on the hedge fund manager salary to help you out.

Salary of Hedge Fund Manager

The salary of a hedge fund manager can go into billions, based on whose portfolio he's managing. The top manager in the United States made around US$ 4 billion in 2009, so that's the higher end of the salary spectrum. Of course, not all of them make anywhere around that amount, but these managers have one of the highest paying jobs. To be sure, there are a couple of factors the manager's salary is based on.

Commission
The first factor is of course, the charge that the manager demands every year for managing the fund. Usually, the charge is about 1 - 2% of the total money invested. So the more money he handles, the more money he receives as his salary. Typically, managers handle money of a lot of the richer clients and hence, the commission they earn on the investment is generally pretty high and definitely supersedes most salary ranges for jobs.

Performance-Based Fee
Apart from the commission, the manager may also choose to charge a performance based fee. A hedge fund manager generally promises a certain, very high return on the money he invests, and if he can achieve his target, he can charge a performance based fee from the client. The performance based fee commonly goes up to 20% of the profit over the investment of the client. So, if you promise lofty gains and achieve them, you stand to earn a lot of money.

Own Investment
A hedge fund manager very often invests his own money too in the hedge fund and any gains he receives. So the salary is generally a summation of all the three sources of income. The junior manager's average salary was USD 152,744 in 2008, excluding bonuses, which were up to USD 492,819. Now that's a lot of money!

How to Become a Hedge Fund Manager?

I'm sure that after reading the numbers for the hedge fund manager salary, your eyes have probably popped out of the sockets. So, if you're feverishly wondering about which are the hedge fund careers, hold your breath and read on below.

Becoming a hedge fund manager is not easy and you need a pretty good track record if people are to trust you with their wealth. These managers generally hold a degree or two in fields like mathematics, economics, stock market operations, financial management, etc. They generally have to be from reputed schools in the field, because clients check all of this when they entrust a manager with their money. Secondly, the manager has to have a good work experience record. The manager generally starts off small, as an analyst or at a job in a similar company, where he learns his trade and how to work in the stock market. It takes a long experience record and successful investing to become a good manager that people give their money to.

So, this was all about the hedge fund manager salary and how to become one. So, if you are looking to take up this career opportunity, then I suggest you start working your way into a good enough college and start working really hard right away!