BGN Entrepreneur

Uncertainty about the UK’s bonus super tax is diving an increasing number of asset management houses to encourage portfolio managers to invest their bonuses in the funds they run.
The UK Treasury’s imposition of a 50% super tax on bonuses of more than £25000 policy which France has vowed to replicate has sharpened asset managers’ interest. People are tired of not knowing where they stand.
Although the tax largely targets bankers and is unlikely to affect independent asset managers, the situation is less clear for asset managers that are part of a bank. They need to look at the exact regulatory status as some will be wihin the bonus payroll and others will not.
As recruitment in the industry picks up one of the first questions which fund managers changing jobs are reportedly asking is “how will my bonus be paid?”. Existing employees are also concerned.
The reinvestment of bonuses into in-house funds has previously been much more commonplace in the hedge fund and private equity industries than mutual fund world. In continental Europe, industry tax experts said the trend of co-investing is beginning to appear in mainstream funds aimed at wealthy people. This comes as investors are increasingly asking asset managers to re-examine their remuneration and bonus strategies.
The fallout from the financial crisis and the breakdown of trust in the financial crisis and the breakdown of trust in the financial services industry has persuaded some asset managers of the importance of matching their goals more closely to those of their investors.
Investors in hedge funds are increasingly looking for fund managers to put in some money themselves before they invest new money. In addition, many fund managers prefer to manage their money themselves rather than pay someone else to do it. Some asset managers have taken the issue of remuneration a step further. At Neuberger Berman, where remuneration is part deferred, up to a quarter of it is compulsorily invested, half in the strategy managed by the individual and half in a basket of other strategies.

Related posts:

1. £4m Bonus Vs £50 Bonus
   The retailing giant—Sainsbury’s, recently announced a contract with IBM aimed...
2. AIG Bonus Clawback
   American International Group was bailed out with $170 million of...
3. Bonus Laws Imminent‏
   The wheels of reform are finally turning for banking bonuses....
4. Bank’s Plan Offers Jobs Bonus
   RBS has moved to head off a growing row over...
5. RBS-linked Traders’ Bonus Pool of $40m Could Hasten Fresh Tax
   A handful of senior traders in a RBS joint venture...