Investing November 24, 2003

TASS: Q3 Hedge Fund Inflows Set New Record

November 24, 2003 (PLANSPONSOR.com) - Hedge fund investors poured a record amount of net assets, $24.6 billion, into their funds during the third quarter, according to research compiled by Tremont's hedge fund and research unit, TASS Research.
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This comes on the heels of a $13.8-billion Q2 inflow (See  Tremont: Hedge Funds Net Record Inflow For Q2 ) and rounds out 2003 year to date with a record inflow of $45.4 billion through September 30, compared to $16.3 billion for all of 2002, TASS said in a news release.

The strongest Q3 strategy performers were Long/Short Equity with $5.9 billion followed by Event Driven with $5.6 billion and Global Macro with $3.1 billion.   All categories tracked enjoyed inflows during the quarter, TASS said.

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The strategies that attracted the most in asset flows were those that offered exposure to the broad markets.   TASS said that this reflects investors’ desire to participate in the equity market recovery in 2003 while also gaining exposure to non-correlated, absolute return strategies.

The TASS Research quarterly analysis of hedge fund flows is based on a comprehensive analysis of approximately $426.9 billion in hedge fund assets.   TASS Research provides data and research on the performance of more than 5,400 funds.

Benefits November 21, 2003

PE Jobs See 2003 Total Pay Decline

November 21, 2003 (PLANSPONSOR.com) - Although all 11 positions in a new private equity industry survey saw base pay gains, that wasn't the whole compensation picture this year - particularly for some top jobs.
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The 2003 Private Equity Compensation Survey from Mercer Human Resource Consulting found that base-pay increases for spots ranging from partner-level to administrative jobs ranged from 3.2% to 9.6%. However, when carried interest distributions were factored in, five of the positions suffered a decline – including a significant 31.5% drop (to $1,277,700 in 2003 from $1,865,000 in 2002) for the managing general partner/CEO position.

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Other positions showing an overall decline in total pay include:

  • CFO/administrative partner, -11.3%
  • chief operating officer, -7.5%
  • mid-level partner/senior vice president, -4%
  • senior partner/executive vice president, -2.5%.

Lower-level, non-leadership employees – such as associate, analyst, and administrative manager/coordinator – fared much better with increases in total compensation of up to 18.2%, according to the Mercer research.

In addition to its influence on pay, the still recovering economy also appears to be affecting private equity firms in other ways. When asked about their overall workforce size for the past three years, 22% of the survey participants indicated it had decreased, while 56% said it had increased and 22% indicated it stayed the same. Nearly one-fifth (18%) reported having a head count reduction in 2002, compared to 15% in 2001.

The survey examines compensation levels and practices for 11 positions common in the private equity area, including partner-level, professional, and administrative jobs. The 2003 survey includes data provided by 72 firms (63% of which are private firms and 38% of which are institutional) representing a total of nearly 1,000 employees. The organizations surveyed have an average of 25 employees and average total capital committed for all active funds of $1 billion.


The 2003 Private Equity Compensation Survey can be purchased from Mercer online at www.imercer.com or by calling 800 333 3070.

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