[TrackerFF]

I've said this before, but the managing director of the Norwegian Pension Fund - which currently sits at a cool $1.56 trillion, has a $657k salary. Nothing more, nothing less. The return for last year was around 25%

Some of the fund managers there make more than the managing director, but still, we're talking about a "modest" figure in the $1mm-$2mm range. That's paltry pay compared to the big bucks made in hedge funds and private equity.

The pension fund could have paid out hundreds of millions to their fund managers, and it would only have been a rounding error in the grand scheme of things...but still they manage to attract top talent.

There's this culture on Wall Street (or Connecticut, or London...) that they are the only ones that can bring big returns, because they're the right combination of correct pedigree, professional experience, network, talent, etc.

In the end, it's just good salesmanship. Tons of funds deliver mediocre returns, while making bank.

[lkdfjlkdfjlg]

Good example.

Yes of course, not everything is about money. There's also 1) prestige and 2) the promise of future money. The Norwegian Pension Fund specifically is very prestigious, and it promises that anyone who can do a good job with $1.5tr probably can also do a good job at one of those 100bn fund that do pay 10m/yr.

[krupan]

Is the manager of that fund really "top talent?" How hard is it really to make 25% off of $1.6 trillion? I'll bet you could do it.

Also, that's a very different job than working at a hedge fund. Hedge funds have to attract investors. How do they do that? By saying, "look at the expensive managers we have!" A government pension fund doesn't have to do that.

[fatnoah]

I wanted to accuse you of being preposterous, but it looks like S&P 500 grew 24.1%, Dow 13%, and Nasdaq 43% in 2023. A basket of investments spread evenly across those would have returned around 26.7%.

[orangecat]

How hard is it really to make 25% off of $1.6 trillion?

Consistently? Basically impossible.

[red-iron-pine]

aye. S&P is up like 25% and lots of other markets are way up too. at this scale you're going to have returns that look like the global market, esp. if you're diversifying and taking relatively risk-averse choices.

[TrackerFF]

Well, prior to joining the fund he had (still has) a hedge fund and is worth close to a billion, and is otherwise on par with the other hedge fund managers you'll find out there (elite education, good "pedigree" and all that).

Of course, government pension funds have much stricter investment guidelines. And there are ethical investment guidelines on top.

Their goal is never go chase the absolute largest returns, as the risk / investment guidelines would prohibit that.

[ZoomerCretin]

The talent available for this position far outstrips supply. So the jobs go to the credentialed children of the elite, who of course require hefty compensation.

In the age of index funds outperforming hedge funds, the real question is how long they can keep up the grift.