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Street for undergrad straight to HF would be 15-25%.
Do you have a resource for this? I've been told a variety of numbers, and none have been as low as 15%. My signing bonus was 5k as is.
It's really hard to tell bc funds vary a lot in how they comp but let's work some numbers.
Assume $300 mm under management, 2% mgmt fee, so $6 mm just in fees. Let's also assume a 20% performance fee and a +10% year, so $30 mm gain in assets and the fund gets 1/5 of that, or another $6 mm.
So, $6 plus $6 gets you $12 mm of 'revenue'. Probably half of that is wrapped up in rent, computers, base salaries, and non-invesment professional staff, so there's $6 mm left for the investment professionals. I'll assume there are 10 professionals, which is 1 senior PM, and then you and everyone else. Senior PM takes a quarter, $4.5 mm left for the other 9, or average $500,000 each. If the average for these guys is $500,000, maybe average experience is 7 years, and you roughly double your total comp every 5 years, in your first year you should expect around $31,250, for total all in comp of $65,000 + 31,000 = $96,000.
For another reference point, Glocap's 2008 report (note the world has changed a lot since then) investment professionals with 1-4 yrs exp avg base was $126,000 and bonus was $166,000, but this is regardless of fund size, performance, or investment style. At 5-9 yrs experience, the numbers are $187k and $490k, total $677k, and 10+ years experience it's $221k and $765k, total $986k. This is where I get the 'double every 5 years' estimate.
All things considered I think total comp of around $100,000 or a little more would be about right for the first year at a small fund.
Hope that helps, and let us know how things go!
At a small fund in your first year with no prior experience, you should set your expectations low. In my opinion, even 15% would be a nice bonus at this stage in your career. It's not 2007 anymore - consider that your peers who went into other fields may not get a bonus at all.
You work at a small business and your pay is totally discretionary. Considering that most likely you still represent an investment in training, you're not being 'screwed' at all if you're not paid much in the near term. The value of a foot in the door in the industry and the experience you're getting, which positions you to make multiples of what you do now in a few years, means you should be pretty happy with any bonus now as long as there's visibility into comp increases in the future.
Ultimately, market comparisons are kind of irrelevant because it depends entirely on your PM's generosity.
There is no way to tell because a) comp varies massively depending on how well the fund has done and how generous the partners are and B) the term "analyst" is very nebulous at hedge funds and could mean a whole range of things. I have seen analysts who make 60k all-in and I've seen analysts make 7 figures.
At a small HF out of undergrad, expect 15%- 25%, or all in comp 75k - 85k. I am sure you are thinking it would be more (i.e. IB makes more, etc.) but from everything I have seen this is not the case; Even at larger PE/HFs, out of UG pay is relatively low (by larger I do not mean KKR, Blackstone, etc.). Check the comp database for analyst with PE/HFs.
However, the work and hours are better than IB so there is a trade-off.
On the will your boss screw you, he already isn’t at 65k base, so remember that. Also remember to assume he will screw you on bonus. And finally, he may screw and then lead you on by bumping your next year comp to 95-110k all in.
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