Investment managers make an average 1,500 euros a month on a mutual fund market where profitability is highly dependent on the volume of managed assets.
The salaries earned by local investment managers, which are up to three times lower than on other emerging markets, confirm the burgeoning stage of the Romanian mutual funds industry.
"In Hungary and Poland, the monthly salary of an investment manager is up to three times higher than in Romania. Here, a manager earns somewhere between 1,000 euros and 1,500 euros a month," believes Ilie Cenan, general manager of management company Globinvest, in Cluj.
Earnings of fund managers consists of a fixed salary, which is highly dependent on the volume of assets managed, and a bonus, granted depending on the yield derived by the mutual fund and on the amount of net sales.
"Fund managers are paid based on their performances. On developed markets, in addition to the fixed salary, a fund manager receives a bonus, which is dependent on how much the yield exceeds the benchmark, which is set in comparison to other funds on the market, which are positioned in the same category," says Mihail Ion, chairman of Raiffeisen Asset Management.
Romanian fund managers handle total assets worth around 240 million euros, while their Hungarian counterparts handle over 9.6 billion euros in assets.
In Poland, mutual fund assets exceed 32 billion euros. The difference between salary levels can in part be explained by the large difference between the volumes of assets managed.
"The small volume of assets does not allow management companies to provide adequate salaries to their fund managers. In order to be profitable, a management company needs to handle funds worth over 25 million euros," Globinvest's Cenan adds.
"Salaries are good, for the time being, considering the volume of assets managed, but I think they will increase further. A junior fund manager earns around 1,000 euros a month, while an experienced one can make as much as 2,000 euros a month," believes Eugen Voicu, chairman of Certinvest.
The salaries of investment managers are derived from fund management commissions, collected from the company's assets.
A simple calculation reveals that 15 management companies handle assets worth 240 million euros, while the management commission accounts for around 2% of the assets. Therefore, one management company, which employs up to 15 staff, derives monthly revenues worth around 22,000 euros.
"The bulk of a company's revenues are allocated for salaries, while expenditures that involve the depositary bank and distribution amount to up to 40% of revenues," says Serban Nascu, vice-president of Target Asset Management.
Bonuses are set depending on the profitability of the management company and on the yield of mutual funds.
"If the company performs well, up to 4.5% of the profit is distributed to the employees," explains Cenan.
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