HF levels comp breakdown 
(Monkey, 39 
Points) on 6/9/09 at 1:34pm
I'm sure many of us are familiar with 2/20 and the annualized league tables of top fund managers making obscene amounts of money. I know there's a somewhat standardized salary (although bonuses are obviously all over the map) for first year people.
My question is, is there a standard composition breakdown between managing partners, pm's and analysts at big funds. I know there's no industry standard, and it obviously depends on returns, but to make an analogy, at law firms partners usually pull in on average about ten times what an senior associate makes. I know most bb's (at least in banking) have a somewhat similiar compensation structure.
I'm sure many of the responses I'm going to get are going to be ridiculing my assertions of uniformity. But I was wondering if anyone had any insight beyond the obvious "it varies greatly"
A pretty typical career
by big unitA pretty typical career progression for l/s HF's is 2 years equity research, maybe 3, then go to buyside. One of my sell-side research friends told me that his 1st year comp for a medium sized fund (1 bn - 5 bn?) is 90K base + a bonus expected to e 100% of base. The majority of his work his idea oriented.
HF
by laxn103The majority of his work his idea oriented.
Would you mind expanding on this a little bit?
What he means...
by yahooThe majority of his work his idea oriented.
Would you mind expanding on this a little bit?
is idea generation. As in he generates, or aids more senior employees in the development of, ideas on markets to be implemented as trades.
Yep - actually its a girl so
by big unitYep - actually its a girl so I have no idea why I referred to her as a male in my previous post. She doesn't do much modeling, she mostly just uses models from BB sell-side research and plugs in some revised numbers. so rather than generating models and quantiatative analysis, she generates potential investment ideas using the numbers and models provided by the sell-side (firms such as Lehman/Barcap, ML-BOA, CS, and to a lesser degree GS and MS).
Then she generates lots of different ideas in her specific space using the numbers she is given, slowly narrows the ideas down based on preset fund requirements, and then swings them her senior analyst who looks at them and gives his thoughts. Then theres a cyclical process of further refining and vetting ideas to see what might work. Finally, the senior analyst gives the idea to the PM who makes the final decision.
Its a really, really awesome job from what it sounds like - she really enjoys it, only works 60 hours a week but its all quality time that she feels like she is learning.
Keep in mind that she works at a very standard L/S fund that isn't that large, many of the larger funds have analysts do a fair amount of modeling themselves.