Hedge funds’ employee cost overheads differ by thousands

Michael Bow
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HEDGE fund overhead costs for individual employees differed by thousands of pounds between firms last year, with some funds spending up to £10,000 a day on each employee, research shows.

Research obtained from Hedge Forensics shows the most cost-conscious UK hedge fund has managed to cut its overhead costs down to as little as 50p a day for each member of staff.

The data, taken from the firm’s Top 200 Report, which ranks data on the UK’s hedge fund community, shows some smaller boutique funds are spending £10,000 a day per person for prime office space in Mayfair, the traditional home to the UK’s hedge fund community.

Hedge funds are one of the biggest contributors to London’s booming property market, accounting for over £100m a year in paid rents due to their prime office locations.

However, the report claims that large funds employing lots of staff can often lose out on growth, profitability and efficiency.

Man Group, which has more than £1bn in turnover and 1,500 employees, fails to make Hedge Forensics’ top 20 on the three metrics. The UK’s top 250 hedge funds made pre-tax profits of £3.1bn last year on the back of £7bn in turnover.