Vanguard's London pay: a mere fraction of Citadel's
Passive asset management might not have the day-to-day excitement of other buy-side functions such as hedge funds or private equity firms, but rest assured: its people are well-fed, even if they’re not eating caviar.
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Vanguard, one of the world’s biggest asset managers with $9.3tn in AUM globally, much of which are invested in passive index trackers and ETFs, posted accounts for its London subsidiary, Vanguard Asset Services Ltd., last week.
Vanguard Asset Services Ltd. paid its people an average of £138k ($185k) in 2023, up from £126k ($168k) in 2022. That’s despite it increasing headcount by 8% to 951 people. Most of the increases were in investment management professionals, as well as legal & compliance staff.
Both pay figures are a far cry from pay at a hedge fund like Citadel, which paid its employees an average of £1.1m ($1.5m) per head in 2023. That's not exceptional for the hedge fund industry, with many London hedge funds paying on par or thereabouts.
But working at Vanguard has benefits that hedge funds don’t offer, however. For one, the fact that it’s a passive asset manager means things are a lot more relaxed - there's more job security. The last big round of cuts at Vanguard was probably its 2022 shutdown of its Hong Kong and Japan operations, and that was related to US-China geopolitical tensions, not market performance. It also cut 40 roles in Australia earlier this year, according to Capital Brief, as part of a restructuring.
Passive asset managers are also a lot more relaxed than hedge funds. Hedge funds are rife with burnout, with managers working 14-hour days with high tension throughout the year as they struggle to beat their benchmarks. (Passive) asset managers doesn't have to beat the benchmark - they maintain it.
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