Hi - any advice / opinion on this would be appreciated if possible...
I recently received an offer to go to a hedge fund, well known name, $3bn AUM, c.10 employees.
I'm a London based sell side ER at a bulge bracket and have been working there 2 years. I enjoy the job, but it is hard work, I usually work 12-14 hours a day with weekend work, and the bonus a few weeks ago was not as high as I wanted.
I had always thought to myself if the right buy side opportunity came up I would take it... now what i am unsure of now at this point is three things:
(a) guess this is par for the course, but on compensation they will say £100k with a "75-100%" bonus. How do you read that bonus figure... obviously this is an important issue and probably the key one for me.
(b) job / life / stress / general the pros and cons of the job vs. sell side ER, apart from the compensation issue.
(c) how rare are these opportunities. Fund is a good one, they are a client of ours and a good name... is it realistic to hold out and try and get an offer at a bigger name.
I enjoy it on the sell side as I say, but the sector I work in is not great, I get frustrated writing maintenance research, and I am trying to weigh up the risk/reward here... if anyone has been in a similar position and could offer advice - or just if someone has an opinion - that would be awesome.
Cheers.
a) You can expect your all-in comp to range from 175k - 200k
b) Tough to generalize as the answer is highly fund/group/peer specific but the stress is different in that depending on your role you will be judged primarily on your performance, ability to generate ideas, and support your PM. Most buyside shops are less bureaucratic than a SS BB but again impossible to generalize with the data provided. If your goal is to ultimately become an investment decision maker then the switch is a no-brainer. I suspect that the actual work would also be more intellectually stimulating but again depends on the manager style and approach.
c) Given how competitive the field is and the limited number of seats I would say that while the opportunities may not be rare for a qualified candidate the number of positions that are actually a good fit for you and the firm are quite rare. You should take this new role and if you do not enjoy the work try to leverage your role into a better fund.
Good luck to you.
Thanks... so you reckon in general you can more or less take their bonus figure at face value? Obviously anything can happen, but in general it is a fair assumption to make? £175-200k would be hard to say no to.
as long as you show up and do a good job yes you should expect 175kto200k, congrats on that, quite a good offer
Dude, imagine never having to go through compliance to publish again.......it's worth the move just for that.
With you there mate... up there with not having to publish previews...
Am I missing something here?
You get an offer from a big ($3bn is BIG in London) HF w $300m / investing professional while most ER analysts in London cant even go to a shitty long only AM paying £50k and you get a base of £100k (while after 2y of ER your base most probably is below 55 with a very low bonus), i.e. an all in at least 3x your all in in ER And you hesitate?
The only possible explanation would be that you have 2y of ER but a lot more xp in other industries but if you are 2y out of school, you should be more than ecstatic...
This.
Thanks- appreciate it.
Don't get me wrong I am certainly extremely tempted that's for sure (by which I mean I will likely go)- my issue is more can I take that bonus figure at face value... as you say if it turns out at 75% that's an enormous (not quite 3x but yes almost) increase in all-in comp for me.
But I am v much a natural sceptic and do not at all want to be in a situation where (a) bonus disappoints for no good reason or (b) you perform bad, maybe poor luck but bad nonetheless, and then you're out and looking for jobs again. What would happen then if you had 2.5 years ER experience (yes btw, out of school), then 6 months in a decent HF but you don't perform... what're your options then...
Guess sometimes you need to take chances right? High risk high reward. I enjoy it on the SS to be honest as I say, but money talks.........
You'd have to do fairly badly probably not to get the75pc given their base is very competitive, but as outsider this is nearly impossible to judge.. Also given the figures you stated even zero bonus would be higher than your current Allin so this is clearly not about the money.
Given your doubts around the role given risk etc... I'd give serious though whether this role change is right for you. If you are looking for a safe stable role with high comp visibility this is not for you.
You could consider changing sellside shops though 14hours a day plus weekends sounds very long, the guys I speak to are never in the office that long :O.
Should probably have given the reasoning behind the risk point- I know someone who used to work at my shop went to a very large US fund in 2008. Anyway long story short he was apparently v good on SS, then went to this fund for a year and was canned (obviously 08-09 not best time to start)... but he was then without a job for 2.5 years. He's now back at the SS at another BB.
I've wanted to be on the buy side since first year of university, I only went to sell side because I couldn't get a buy side job out of uni and have actively looked for positions since started on the sell side 2 years ago. But this guy's story is in my mind nonetheless.
On hours... thing is with the SS is you ramp up as fast as you want to go right... if there are names to cover and you want to ramp up coverage asap then you need to work after hours if you are going to have a lot of client contact during the day. I could easily leave at 5:30 if I wanted to, no problem- but it would take a lot longer to get the franchise you want.
Hit me up if you decide to decline the offer, would be happy to replace you at the HF. I'm serious.
Got gooosebumps with your profile pic.
You remind me of me...I can definitely see where you're coming from. Life on the sell-side, while it has its downsides (hello compliance), is nice, comfy, and safe. It's hard to fuck up so badly you get fired, unless your firm is just having a rough time in general. As you get further into your career on the sell-side, the opportunity cost of giving up that comfy lifestyle to take your swing on the buyside increases. Assuming you are well-qualified and competent (and can land on your feet if things really don't work out), I would rather take this career risk earlier rather than later. In fact, in your situation, based on the info you have given us, I would almost certainly take the buyside job at this point.
Extremely good point. Thanks a lot for the advice.
I'll give you my two cents here as I went through this process not too long ago. I would clarify the structure of the bonus. Two important things here: 1) will the bonus be all cash and 2) will that 75-100% of base grow as you become more senior in the firm. Also, this is firm dependent, but consider negotiating some sort of mechanism whereby as you get more senior your comp is tied to the success of your trade ideas. Again, some funds do this (others don't) but I don't think it's unfair to get a sense for this.
Great points, thanks a lot. You say you went through the process not long ago?
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