By : Khuram Bajwa , Posted on: 17th, November 2022

The true staffing cost of a sub-$1bn hedge fund.

For first-time COOs or investment professionals looking to make their first non-investment hire

With more than £9.4trn of assets under management in the UK, it’s no secret that it’s a continued challenge to raise and retain capital.

Global turmoil like high inflation numbers, changes in monetary policies, geopolitical tensions - specifically the military conflict in Ukraine - and soaring energy prices have only made this harder.

In a turbulent market shaken by global disasters, coming up with a viable game plan is necessary to take your non-investment team from startup to $1bn. Having the right people on your team is now more important than ever.

Understanding how the right hires can help

As with most things in the industry, people sit at the centre of a business's success. To keep up in uncertain times, fund managers are having to make tough decisions based on efficiency.

By navigating post-pandemic recovery, fund managers have a chance to truly prepare for the future, both in terms of opportunities and ongoing challenges.

It’s essential to understand the cost of a growing hedge fund infrastructure to accurately benchmark budgets, measure performance, facilitate team growth, and supply the basis for business strategies.

By dissecting the inner workings of your non-investment fund, you will be able to pinpoint the big-picture implications of the wrong hiring decision and, more importantly, highlight the benefits of the right ones.

The key roles to look out for

Hedge funds can vary considerably in size, from funds valued at less than $1bn to the world’s largest hedge funds valued at over $100bn. Consequently, the number of employees also differs from fund to fund.

Several different roles contribute to the smooth running of a hedge fund, from C-Suite executives to those who make up the non-investment side of the business. It’s crucial to know who does what before you start your hiring process.

Different C-Suite positions

While this structure represents the average C-Suite hires, it will differ from firm to firm. Reach out to Mush for a detailed chat about how you can make your first successful C-Suite hire.

What does it cost to run a non-investment team?

There are plenty of costs involved in running and managing a fund, from research and trading fees to set-up costs, office space, marketing, business development, staff, and what you pay the fund managers themselves.

This article specifically hones in on the costs involved in hiring a non-investment team in sub-$1bn funds. Non-investment teams are made up of the COO, compliance, legal, marketing, sales, and investor relations.

For a fund below $1bn, salaries for your non-investment team can range anywhere from £350K to £1.7m.

These numbers can be further broken down as follows:

Day One

£500m - £1bn

£1bn +What One Ten Associates can do

The ability to hire decisively and effectively is key for a fund growing at pace. At One Ten Associates, we can’t stress the importance of having an experienced, specialised team on your side enough.

Making a non-investment hire can be difficult. Often, those making them will come from an investment background and are likely to be unsure of what to look out for. That’s where One Ten Associates come in.

We have 20 years of combined non-investment experience and can actively guide you through your essential first hires.

We’re in the process of creating a full One Ten Associates guide on how to take your startup non-investment fund to the value of $10bn. The guide will help you understand the cost of a growing hedge fund infrastructure in terms of business strategies, team growth, and staying within budget. Stay tuned!