Bonus Watch ’14/Layoffs Watch ‘15: Hedge Funds


Hedge funds did a spectacular job not making money last year. That translates into a 30% drop in profit for the industry in 2014. And that translates into 60% drop in the bonus pool. And that, for those of you working at smaller hedge funds, is the good news.

The drop means a significantly reduced bonus pool of $9.2 billion for the fund managers and analysts running the nearly $3 trillion industry in 2014, as compared with $23.1 billion in 2013….

The outlook for hedge funds, already closing at the fastest pace since the financial crisis, is about to worsen, according to Citigroup Inc….

“Poor performance will be most acutely felt by small hedge fund firms,” Sandy Kaul, global head of business advisory services at the New York-based company, said in the report, referring to those with an average of $100 million in assets. “These funds simply did not generate enough performance-fee revenues in 2014 to cover their gap.”

Hedge fund profits drop 30 pct in 2014, bonus pool shrinks [Reuters]
Hedge Fund Profits Declined 30% Last Year, Citigroup Says [Bloomberg]