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Part 2: Creating an Infrastructure and Budgeting Internally

This is Part 2 of a 4-part series. Read Part 1 here.

Depending upon the size of a firm, there are a number of key C-suite executives that asset management firms will want to have on staff. The salary for these key employees will be determined by the qualifications being sought by the hiring firm, the qualifications of the prospective new hire and the current AUM of the firm. Below is a breakdown of key functions and general compensation data points:

CIO

What is their role?

Often the founder of the firm

What are their responsibilities?

Manage and monitor portfolio and portfolio risk

What should their salary be?*

The CIO could receive a salary or their respective share of profits at year-end

CFO

What is their role?

Key financial role at the firm

What are their responsibilities?

  • Ensure maintenance of internal controls and financial procedures
  • Develop financial business plan and forecasts
  • Create and monitor budgets
  • Financial planning
  • Forecasting

What should their salary be?*

$200,000 - $400,000 
(not including year-end bonus and/or equity participation)

COO

What is their role?

Key operational role at the firm

What are their responsibilities?

Oversight of:

  • Finance
  • Middle office operations
  • Legal/compliance
  • Trading
  • Human resources
  • Technology
  • Marketing

What should their salary be?*

$200,000 - $400,000
(not including year-end bonus and/or equity participation)

CCO

What is their role?

Key legal/compliance role at the firm

What are their responsibilities?

Key legal/compliance role at the firm

  • Ensure compliance with standards regarding firm functions
  • Registration and ongoing compliance with regulatory authorities (SEC, NFA, CFTC, FCA, etc.)
  • Ensure the firm is meeting regulatory reporting requirements (Form PF, FATCA, AIFMD, Annex IV)

What should their salary be?*

$200,000 - $400,000
(not including year-end bonus and/or equity participation

*salaries are reflective of small- to medium-sized funds

In order for any firm to get off the ground, there are certain minimum costs. The most successful managers are those who understand the intricacies of running a business – including having a budget in place. The unsuccessful managers are those unwilling to subsidize these costs during the early stages of the fund.

Frank Napolitani, Director, Financial Services Group has nearly 20 years of experience working with organizations including a fund of funds, family office and prime brokerage firms, and providing consulting to investment fund managers.

Contact Frank

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