Sloane Robinson partner earns £87m

Sloane Robinson cemented its position as one of London’s most successful asset managers last year as the hedge fund reported that profits had risen by two-thirds to £340m in the 12 months to March 31, well above traditional fund managers that are far larger.

In accounts filed at Companies House, the privately owned Sloane Robinson partnership said 14 partners would share the profits, with the highest earner taking home £87.3m, up from £51.4m the year before.

The firm refused to say who the best-paid manager was, but investors in its funds said it was likely to be Richard Chenevix-Trench, chief investment officer.

The size of the profits demonstrates the attraction of hedge fund fees, which are very high compared with traditional asset managers.

However, the profits are flattered by the lack of salaries paid to the partners, meaning they cannot be compared directly with the results of a listed company such as Schroders, which made only little more pre-tax profit in 2007, or Henderson, New Star and Aberdeen, which together made less than Sloane in their last annual profits.

The strong growth in profits for Sloane Robinson in the year to March 31 came after an excellent year in investment performance for one of the first European hedge funds, with its main funds recording bumper returns. Hedge funds typically make most of their profits from performance fees linked to returns.

However, losses for all Sloane’s main funds this year will make it challenging to earn annual performance fees. The firm does not break down the proportion of its fees that come from performance, but it is typically well over half a hedge fund’s income.

“July and August have been particularly nasty for these guys,” said one investor in the firm’s funds. He added that Hugh Sloane, who co-founded the firm with George Robinson in 1993, was taking a more conservative approach than Mr Chenevix-Trench, who oversees Asia and emerging markets, or Rupert Dyson, who runs European investments.

However, Hugh Sloane’s SR Global International fund, up 40.6 per cent last year, was still down 7.4 per cent by August 20. His SR Global Japan, one of the few to prosper during the rout of Japanese-focused hedge funds in the first half of the year, has given back all its profits and is now down slightly.

Mr Chenevix-Trench’s SR Global Asia is off 18 per cent after a gain of 30 per cent last year, and his Emerging Markets fund is down 19 per cent, against a 34 per cent gain last year. Mr Dyson’s Europe fund has suffered most, however, dropping 21 per cent and wiping out all last year’s 15.5 per cent gain.

Neither Mr Sloane nor Mr Robinson could be contacted for comment on Friday.