Fund Managers are breaking the records

Fund managers with experience across bull and bear equity markets are becoming a rarity in the industry. Very few left with more than a decade of good track record. Asset management companies are paying skyrocketing salaries to retain these 'rare species'.

The top echelon fund managers today include Prashant jain of HDFC, Nilesh Shah of PruICICI, A K Sridhar of UTI, R Sukumar of Franklin Templeton and K Rajagopal of Reliance MF. They have stayed in the industry for more than a decade with a good track record of performance. Their salaries range anywhere between Rs. 50 Lakh and Rs. 2 Crore.

Fund managers compensation structures are typically related to the performance of their schemes vis-a-vis peers. They mostly come from top rung B-schools and are found on the wrong side of 30s or early 40s.

Prashant Jain, a 38 year old IIT-IIM alumnus, has spent more than a decade in the fund industry. Earlier, he was with Zurich India MF. Nilesh Shah, a CA, is famous in debt market, has shifted recently to equity markets after joining PruICICI AMC. Likewise, Mr. Sukumar and K N Subramanian of Franklin Templeton, both BE and IIM alumni, have had more than a decade-long experience in the equity market.

Reputed fund managers are paid astronomical salaries - more than CEOs of many listed companies. A typical fund manager with 3-5 years of experience earns upwards of Rs. 60 lakh per annum and the best upto Rs. 2 crore. Typically, there are fixed and variable factors with the variable component ranging anywhere between 50-100% of the fixed component. Variable factors include fund performance relative to its peers.

Outside India, fund manager slaries have higher linkage to relative performance of funds. Optimix overseas for instance, follows 12-month rolling relative return for giving bonuses. This compensation structure is not expected to be any different in case of Indian funds.

Source : The Economic Times