Given all the hoopla this segment of the investment world gets, I thought I’d continue from last week’s blog post with a few facts about the hedge fund industry that you may or may not know:
1. $2.5 trillion in assets under management
Though the precise size of the industry is unknown (since so much is kept so secret), there are approximately 10,000 hedge funds that manage an estimated $2.5 trillion in assets. By comparison, there are just under 8,000 registered mutual funds companies in the United States who collectively manage $11 trillion.
2. Average pay is substantially higher than mutual funds
The average junior hedge fund portfolio manager earns a base salary of $150,000 while senior managers earn $180,000. Their bonuses however make a world of difference, with junior managers seeing average annual bonuses of $400,000 while senior managers average $500,000. Mutual fund managers by comparison earn an average of $144,000.
3. The industry beats the market... just
Between 1994 and 2005, the aggregate US stock market produced an average annual return of 10.6%, this return was marginally outpaced by the hedge fund industry which saw average annual returns of 11%. Mutual funds prodded along with 8% average annual returns. It should however be noted that in 2009, hedge funds charged average management fees of 1.65% and another 18.89% in performance fees, far more than the cost of either index or actively managed mutual funds.
1. $2.5 trillion in assets under management
Though the precise size of the industry is unknown (since so much is kept so secret), there are approximately 10,000 hedge funds that manage an estimated $2.5 trillion in assets. By comparison, there are just under 8,000 registered mutual funds companies in the United States who collectively manage $11 trillion.
2. Average pay is substantially higher than mutual funds
The average junior hedge fund portfolio manager earns a base salary of $150,000 while senior managers earn $180,000. Their bonuses however make a world of difference, with junior managers seeing average annual bonuses of $400,000 while senior managers average $500,000. Mutual fund managers by comparison earn an average of $144,000.
3. The industry beats the market... just
Between 1994 and 2005, the aggregate US stock market produced an average annual return of 10.6%, this return was marginally outpaced by the hedge fund industry which saw average annual returns of 11%. Mutual funds prodded along with 8% average annual returns. It should however be noted that in 2009, hedge funds charged average management fees of 1.65% and another 18.89% in performance fees, far more than the cost of either index or actively managed mutual funds.
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