Hedge fund managers in the UK are paid on average 58 per cent more than their peers in mutual and pension fund industry, according to survey...

Hedge fund managers in the UK are paid on average 58 per cent more than their peers in mutual and pension fund industry, according to survey conducted by the CFA Institute in London and Russell Reynolds.

Hedge fund managers were paid an average of $344,128 annually, according to the study. This compared to an annual average salary of $217,048 for managers across all types of investment companies.

Among the top 10 per cent of investment managers, hedge fund managers earned on average $1.5 million per year, compared with $647,185 for other investment managers. The survey also found that investment managers in the UK were better compensated than their counterparts in the US, Germany and Japan.

The average annual pay for UK investment staff has increased by 30 per cent to average $167,586, according to the research.

There was also a disparity in the pay stakes between men and women, with men earning on average $221,745, compared with the $182,148 earned annually by women in the investment industry.

One factor that contributes towards higher salaries for hedge fund managers is the fee structure for hedge funds. Typically, hedge funds will charge a 2 per cent management fee and will take 20 per cent of any investment profits.

However, the researchers predicted that the pay gap between hedge fund managers and the rest of the investment industry would soon begin to narrow.

“As hedge funds become more mainstream, salaries will return to the mean,” said John Barrass, European head of the CFA Institute, which awards professional qualifications to investment staff.

He added: "They can't remain at those levels for ever.”

The adverse performance of hedge funds in the first five months of the year is also thought likely to affect pay for hedge fund managers this year.