Hedge bonanza as Marshall Wace chiefs share millions with staff

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The Independent Online

The two founders of a London hedge fund manager have shared a £26m bounty in wages and dividends and made up to two dozen of their staff millionaires.

The two founders of a London hedge fund manager have shared a £26m bounty in wages and dividends and made up to two dozen of their staff millionaires.

The bonanza has been dished out at Marshall Wace Asset Management, based around the corner from Buckingham Palace.

According to recently filed accounts, the founders, Paul Marshall and Ian Wace, were paid a total of £16.2m in the year that ended last August. The higher- paid partner, believed to be Mr Wace, received £8.86m. The two also received £9.99m in dividends, shared equally.

These payments follow handouts of over £30m to the duo in the six years since the hedge fund group was founded. But Mr Marshall, a former fund manager at Mercury Asset Management, and Mr Wace, who was a top trader at UBS before founding the firm, have made sure their staff don't go hungry.

In the year, £32.9m was paid into an employee benefit trust, which is now worth £55.4m. Apart from the founders, the group has 24 employees who benefit from this. The accounts show other generosity: loans of £500,000 to two staff, and more than £2m donated to charity.

Marshall Wace is one of the City's most feared hedge funds, commanding £36.7m in fees during 2002/3. It developed a system called Tips, which gets salesmen to choose what they think are the top stock recommendations and put them into a computer program. If their tips outperform the others, Marshall Wace routes all its business through that firm. Rivals say up to £100m of fee income is on offer through Tips.

When contracted, Mr Wace declined to be interviewed, instead sending an email which said: "A long career in the investment banking industry, and seven years as a hedge fund manager, have convinced me that there is little to be gained and much to be lost from communicating with the press.

"My perspective on this is... from an ingrained fear that things are often communicated out of context and as a contributor you cannot or should not control the agenda."

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