Bonus Payments in M&A, Asset Management & Hedge Funds (UK & France, 2026 Outlook)

Bonus season remains one of the most defining moments across financial services in both the UK and France. It helps to shape retention, affects mobility, and sets the tone for the year ahead. As we move into 2026, expectations among professionals in M&A, Asset Management, and Hedge Funds are evolving to conversations with their bosses and reacting to market conditions. Organisations that treat bonuses purely as financial conversations risk overlooking the broader drivers of loyalty and long-term engagement.

1. M&A: Recovery Driving Bonus Rebound

Following a subdued period in 2023–2024, M&A activity across Europe showed a meaningful recovery through 2025. Total deal value in EMEA increased by roughly 12–18% year-on-year, with London maintaining its position as a leading global hub and Paris continuing to gain momentum, particularly in mid-market and cross-border transactions.

This recovery has translated into improved bonus pools:

• UK (London): Average bonuses for Associates and VPs increased by approximately 10–20%, with top performers in elite boutiques seeing payouts reaching 80–120% of base salary.
• France (Paris): Bonus growth has been slightly more moderate, typically 5–15%, reflecting a more conservative compensation culture and regulatory environment.

When thiknking about their next move, M&A bankers tend to look for:

• Strong and visible deal flow
• Clear promotion timelines
• International exposure

However, this is the first market in a long time where people are genuinely moving to make more money now that the good times are back in the bonus pools.

Firms that combine competitive bonuses with transparent career progression are seeing stronger retention outcomes.

2. Asset Management: Pressure on Margins, Selective Rewards

The Asset Management industry in both the UK and France continues to face margin pressure due to fee compression, passive fund growth, and regulatory costs all while the specture of AI sits at its feasting table. Despite this, market performance in 2025—driven by equity market gains and inflows into alternatives—has supported relatively stable bonus pools.

Notable trends include:

• Bonuses typically ranging from 20–60% of base salary across portfolio management and investment roles
• Stronger payouts in private markets, infrastructure, and private credit, where fundraising and returns remain robust
• More subdued bonuses in traditional long-only strategies

Managers are increasingly focused on:

• Long-term incentive plans (LTIPs)
• Co-investment opportunities
• Stability of AUM and strategy

Employers that align bonuses with long-term value creation and cascading rewards, rather than short-term performance alone, are better positioned to retain investment talent.

3. Hedge Funds: Performance-Driven Dispersion

Amongst Hedge Funds, bonus outcomes remain highly variable and directly tied to fund performance. 2025 saw mixed results across strategies:

• Macro and multi-strategy funds performed well, benefiting from volatility and interest rate divergence
• Equity long/short strategies delivered more uneven returns, particularly in Europe

As a result:

• Top-performing portfolio managers and traders in London saw bonuses exceeding 100–200% of base salary, with truly exceptional performers achieving even higher figures
• In France, where the hedge fund market is smaller, compensation remains competitive but slightly less aggressive, with greater emphasis on stability and structure

Key expectations among hedge fund professionals include:

• Direct alignment between performance and payout
• Transparent P&L attribution
• Access to capital and strong infrastructure

Retention is highest where firms balance upside potential with platform stability and risk management support.

4. Transparency and Structure Across Markets

Across M&A, Asset Management, and Hedge Funds, one theme is consistent in both the UK and France: transparency is critical.

Common challenges include:

• Opaque bonus allocation processes
• Lack of clarity on individual vs. firm performance weighting
• Perceived inconsistencies across teams or geographies

Firms that communicate clearly around:

• Bonus pool formation
• Individual performance metrics
• Deferred compensation structures

are more likely to maintain trust—even in years where payouts may fall below expectations.

Conclusion

Bonus season in 2026 reflects a more nuanced landscape across the UK and France.

• In M&A, recovering deal activity is driving stronger bonuses, but professionals increasingly value progression and deal exposure.
• In Asset Management, stable but selective payouts are shifting focus toward long-term incentives and strategy alignment.
• In Hedge Funds, performance-driven dispersion remains the norm, with top talent prioritising both upside and platform quality.

Across all three sectors, firms that combine competitive compensation with transparency, career development, and strategic clarity will be best positioned to retain talent and build long-term loyalty.

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Sources

• Deloitte – EMEA M&A Trends Report 2025
  https://www2.deloitte.com/global/en/pages/finance/articles/emea-m-and-a-trends.html
• Refinitiv / LSEG – Global Investment Banking Review 2025
  https://www.lseg.com/en/insights/investment-banking-review
• eFinancialCareers – Bonus Reports (UK & Europe, 2025–2026)
  https://www.efinancialcareers.com/news
• Hays – UK & France Salary Guides 2025/2026 (Financial Services)
  https://www.hays.co.uk/salary-guide
  https://www.hays.fr/etude-de-remuneration
• Robert Walters – European Financial Services Compensation Survey 2025
  https://www.robertwalters.com/salarysurvey.html
• Preqin – Global Hedge Fund Report 2025
  https://www.preqin.com/insights/research/reports
• PwC – Asset & Wealth Management Revolution 2025
  https://www.pwc.com/gx/en/industries/financial-services/asset-wealth-management.html
• European Fund and Asset Management Association (EFAMA) – Market Insights 2025
  https://www.efama.org/

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