While this year's subprime and structured finance meltdowns
have negatively affected bonus prospects at some hedge funds,
the broader trends toward enormous inflows of capital and
higher returns overall bode well for hedge fund employee
compensation at yearend and in 2008.
"Those two factors are driving a very good year," says Alan
Johnson, managing director of New York compensation specialist
During the first half of 2007, the assets of 246 U.S. hedge
fund firms managing $1 billion or more increased by more than
23%, to nearly $1.5 trillion, according to the Absolute Return
Billion Dollar Club. Most of this money has gone to the largest
firms, and the trend shows little sign of abating. And despite
negative returns in July and August, the Absolute Return
Composite Index advanced 9.19% for the year through October.
That puts the Index well ahead of its 8.54% return for the same