HSBC unit generates bigger profits despite losing assets
HSBC saw investors withdraw $200m from its hedge fund and private equity unit last year, but managed to increase the profits it made off the remaining assets it manages by 24 per cent.
HSBC Alternative Investments Ltd (HAIL), a part of the group’s private banking division that invests clients’ money in private equity, hedge fund and real estate assets, recorded pre-tax profits of $10.7m last year, its accounts show, despite its assets under management dropping by five per cent to $4.1bn.
The management of the unit, which is led by chief executive Chris Allen, blamed “poor performance within a ‘risk-off’ environment” for the outflows in 2011, a year in which the hedge fund industry received a drubbing after failing to cope with high market volatility.
Average pay for its staff went up from $253,000 to $260,000 for a total payroll bill of $12.2m last year. But HAIL’s highest paid director was hit with a 10 per cent pay cut, taking home £960,000 last year.
It also paid its owner, HSBC, a £6m dividend.