Total compensation for U.S. fixed-income investors rose by more than 10% last year, with distressed investors leading the pack, as low interest rates and improving corporate fundamentals fueled significant spread tightening. Investors' average salaries increased by around 5% to nearly $160,000, and bonuses increased by more than 15% to about $195,000, according to a recent report from Greenwich Associates. Distressed managers raked in a little more than $1 million, up from $694,000 in 2002.
Fixed-income portfolio managers made an average of $374,000 last year, up from $326,000 the previous year, while hedge fund professionals saw their pay increase to $749,000 from $597,000. The data was compiled during the first half of this year when the Greenwich, Conn.-based consulting firm polled nearly 1,500 institutional investors from banks, insurance companies, hedge funds and mutual funds.
Distressed hedge fund investors were the big breadwinners, earning nearly $1.25 million, up from $786,000 in 2002. Elsewhere, below investment-grade credit managers were paid $695,000, up from $516,000.
The low rollers include mortgage-backed managers, who made an average of $257,000 in 2003 and $241,000 in 2002; asset-backed portfolio-managers, whose compensation rose to $292,000 from $268,000; commercial mortgage-backed securities portfolio managers, who took home $358,000 compared to $344,000. Investment-grade portfolio managers, meanwhile, cashed in on $325,000 in 2003 and $262,000 the previous year.