McLagan is the leading provider of compensation consulting services and pay and performance data for hedge funds. We currently work with over 100 hedge funds with a median asset size of $4.5B.
Our industry focus, ongoing client work, and proprietary study data allow us to frame each consulting project within a broad business context and a keen understanding of competitive issues and practices. While the scope of our consulting work varies, we are skilled at working with hedge funds to:
- Provide pay advisory services to senior management, partners, and founders.
- Benchmark competitive pay levels and practices related to human resource issues.
- Design pay programs that are competitive and fit the fund’s culture and structure.
The quality of our work is underscored by the number and prominence of our clients. For example, in the U.S., we work with 28 of the top 30 hedge funds.
Our hedge fund business has gone global with staff located in the U.K. and Asia. We currently work with hedge funds in London and have started working with funds in Hong Kong and Singapore.
Custom research and advisory work (examples include):
- Worked with a $2B fund to assess their pay levels, pay structure and overall compensation philosophy.
- Assisted several funds considering the pros and cons of mandatory deferrals and the specifics of those plans.
- Conducted customized studies looking at HR organizational design and productivity for larger hedge funds.
- Helped a multi-strategy, $10B+ fund to benchmark their senior management team.
- Worked with senior management to develop a pay plan for a $1B quant fund.
- Developed customized pay benchmarks for senior managers at a $8B fund, while also analyzing their internal operating expenses.
McLagan’s hedge fund business includes the following key areas:
Compensation
McLagan publishes two annual, compensation surveys focusing on all back-office and front-office positions (with the exception of portfolio managers). A range of quartile statistics are shown for base salary, cash incentives, mandatory deferrals, and total compensation. This data is broken out by asset size, employee headcount, and investment performance.
Benefits
McLagan conducts an annual benefits study including competitive market data related to medical, vision, dental, STD / LTD, life insurance, retirement, total paid time off, perquisites, and more. Over 50 funds participate in this study.
Pay Design
McLagan conducts studies looking at the specifics of how investment, IR and back-office professionals get paid. How do mandatory deferrals work? What is “true equity” and how often is it used? This study focuses on the structure of the pay programs, and not the absolute pay levels for individual positions.
Expense Productivity
Working with more than 20 funds, McLagan analyzes each firm’s total operating expenses as a percentage of management fee revenues to understand if firms are profitable on management fees. This study also focuses on total investor costs, staffing ratios, per capita analysis and functional productivity.
