What is the difference between a hedge fund and a portfolio manager?
Unlike an active portfolio manager of a mutual fund, hedge funds often cater to higher net-worth individuals and organizations and may invest in several different asset classes including alternative investments, and engage in strategies other than holding long positions.
A manager who manages assets for a large money management institution is commonly referred to as a portfolio manager, while someone who manages smaller fund assets is typically called a fund manager.
What Is the Difference Between an Investment Manager and a Fund Manager? Investment managers focus primarily on individual securities and bond investments while fund managers work with mutual funds comprised of multiple securities and assets, often tailored to a particular market sector.
Traders work for themselves or for a company to place and monitor trades of individual securities, whereas portfolio managers work to develop strategies that allow them to maintain profits or to develop profits over the long term.
Portfolio managers are primarily responsible for creating and managing investment allocations for private clients. Some portfolio managers work with individuals and families, while others focus their attention on institutional or corporate investors.
As opposed to indirect ownership where investors own “units” of a fund that owns the securities, portfolios allow individuals to own those securities directly. Portfolios are also managed by portfolio managers with extensive expertise, degrees, and professional certifications.
On average, though, a PM at a mid-sized fund that performs decently might earn between $500K and $3 million. If you look at compensation reports, median pay tends to be just above or below $1 million, depending on the year.
| Job Title | Salary |
|---|---|
| Portfolio Manager | £72,818 /yr |
| Senior Portfolio Manager | £140,531 /yr |
| Portfolio Manager IV | £99,126 /yr |
| Rank | Firm | Headquarters |
|---|---|---|
| 1 | Bridgewater Associates | Westport, CT |
| 2 | Man Group | London, UK |
| 3 | Millennium Management, LLC | New York City, NY |
| 4 | The Children's Investment Fund Management | London, UK |
Fund Manager salary in India ranges between ₹ 3.0 Lakhs to ₹ 93.0 Lakhs with an average annual salary of ₹ 35.5 Lakhs. Salary estimates are based on 262 latest salaries received from Fund Managers. 2 - 18 years exp. 2 - 18 years exp.
Is an asset manager the same as a hedge fund?
The only goal for asset management is to provide strong returns for the portfolio of assets as a whole. A hedge fund, while similar, is a collection of investment oversight that seeks greater returns through very risky types of investments.
The top individual Portfolio Managers can earn hundreds of millions or billions each year. Hedge funds offer a much higher pay ceiling than investment banking, (sometimes) better hours and work/life balance, and the chance to do more interesting work.
Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid.
Hedge fund managers typically earn above-average compensation, often from a two-and-twenty fee structure. Hedge fund managers typically specialize in a particular investment strategy that they then use to power their fund portfolio's mandate for profits.
Successful hedge fund managers routinely pocket millions of dollars in total compensation, with the top fund managers earning paychecks in the billions of US dollars[1]. This doesn't include how much they personally stand to benefit from their own investments in the funds they manage.
A portfolio manager is a person or group of people responsible for investing a mutual, exchange traded or closed-end fund's assets, implementing its investment strategy, and managing day-to-day portfolio trading. A portfolio manager is one of the most important factors to consider when looking at fund investing.
The responsibilities of a Portfolio Manager vary based on their clients, but typically they build and analyze economic reports, develop investment objectives, and communicate with clients about market conditions.
Portfolio managers at these investment advisory firms earned an average of $1.13 million in total, with base pay of $480,716. Even in the lowest-paying AUM bracket — advisory firms running $500 million to $1 billion — portfolio managers reported total compensation of $448,311 on average.
A diversified portfolio should have a broad mix of investments. For years, many financial advisors recommended building a 60/40 portfolio, allocating 60% of capital to stocks and 40% to fixed-income investments such as bonds. Meanwhile, others have argued for more stock exposure, especially for younger investors.
You should therefore only keep as many funds in your portfolio as you're comfortable monitoring. For example, if you hold 10 or 20 different funds, you'll need to keep a close eye on the changing value of all these investments to make sure your asset allocation still matches your investment goals.
What is the difference between a hedge fund and a fund of funds?
The difference between hedge funds and fund of funds
Investor disclosure requirements are also looser when it comes to hedge funds, another reason why hedge funds are typically open only to accredited investors. A fund of funds, on the other hand, is not limited only to accredited investors.
| Annual Salary | Monthly Pay | |
|---|---|---|
| Top Earners | $244,500 | $20,375 |
| 75th Percentile | $190,000 | $15,833 |
| Average | $157,532 | $13,127 |
| 25th Percentile | $115,000 | $9,583 |
| Rank | Job Title | Hourly Rate |
|---|---|---|
| 1 | Managing Director | $115.93 |
| 2 | Chief Administrative Officer | $71.32 |
| 3 | Development Director | $65.93 |
| 4 | Senior Software Engineer | $65.45 |
Compensation spans a huge range at this level because it's linked almost 100% to performance. We gave a range of $500K to $3 million USD in the hedge fund career path article for the “average” PM, with median pay in the high-six-figure-to-low-seven-figure range.
The portfolio management company must have a net worth of at least Rs. 5 crore. The portfolio management company must have a clause in their MoA (Memorandum of Agreement) that the company can undertake PMS business.
