Top Hedge Funds: Analyst Compensation
Hey guys, roughly how much can one expect in base pay from a multibillion dollar long/short hedge fund for an analyst coming out of banking? I've searched the threads but many were outdated. Any rough idea of total compensation in a typical year would also be appreciated. Thanks a lot.
Hedge Fund Analyst Pay
Total average compensation for hedge fund analyst's is 152k. The average base being 98k and the average bonus being 54k.
Analyst Compensation at Top Hedge Funds
Let's take a look at compensation for analysts at top hedge funds. We'll be providing information on D.E. Shaw, Citadel, Bridgewater, and A.Q.R. Capital. Each firm is listed in from the article
Total hedge fund assets under management hit $3 trillion last year for the first time, but that was thanks to higher security prices. Net outflows persisted, and fund liquidations totaled 1,057 the highest level since the financial crisis, according to Hedge Fund Research.
Therefore, the following funds are not only large but also accomplished. For more information on the metrics and the complete report visit 2018 Wall Street Oasis Hedge Fund Industry Report. Averages are calculated using compensation data from 79 different funds. Bayesian Statistics were used to account for standard deviation in rankings.
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It's all highly dependent on the fund and how it's organized. In my experience, you can expect something on the order of $150,000 as your base salary. Again, there's no "hard and fast" rule to abide by, and that number can deviate by tens of thousands of dollars depending on where you end up and how the fund chooses to allocate their base/bonus mix.
I would say base is going to be 100k-150k with all-in comp in the 250k-350k range. 2nd year all-in would be in the 400k-500k range. After that, variability is going to swing widely. If you are a top Tiger fund or one of the really high profile places it is going to be higher, if you are at $2bn fund with ok performance and a 1/15 fee structure it might be less.
The HF analyst space is not as uniform as the post banking megafund PE space but the two are competing for the same pool of candidates. It is a LOOSELY efficient market and pay will be similar.
I think that's spot on. My first year stub was 120 base, 330 all-in prorated. Then second year (first full year) was same base, 400 all-in.
400 all-in for second year seems a little high. How much AUM does your fund have?
I was thinking the same thing.
what about for straight out of college?
Straight out of college is pretty rare and you will probably be paid similar to a banking analyst the same year. Again, very few funds hire people right out of undergrad
I took a HF role straight out of college, and the pay was in line with post-banking numbers quoted by others, although I am at a quant firm.
I have friends that joined the non-quant group at our firm out of undergrad (L/S equities) and their pay is ~50-100k less, but still more than what most banks pay.
aaaaaand let the fapping begin.
Just goggled what flapping means... priceless
Good thing you had your goggles on...
Gray Fox is correct. I mostly see/hear $60-80k base for kids straight out of school. This seems right to me, as you are most likely dead weight for the first year+ anyway.
More of a learning experience; wouldnt worry about the comp
Yes, the information from @"Gray Fox" and @"Cries" sounds about right to me. Obviously this can vary - especially for the most elite HF and top Ivy grads. After the first 1-2 years comp will likely increase exponentially, assuming that both the individual and fund are performing at a decent level.
But can someone put a range on out of college pay at a MF with historically great performance?
Is there any MF with historically great performance? Unless by historically, you mean 20 years ago.
SEQUX...
The figures GrayFox has provided are consistent with what I've seen.
I think Gray Fox is inline with his first year average (250-350 all in) but I think the second year all in number is closer to ~325-425. This is obviously an average so there's going to be people above and below and I've personally seen / know some 1st or 2nd year kids who have made 500k+ but that's not the norm; at least not in my opinion...which may be worth nothing..
God dammit, so it seems like I'll be in limbo about pay for the next year and a half. Then the cash flows starts to rollz.
It was probably a mistake to put reasonable numbers up rather than go with the standard response of "Hedge Fund comp is highly variable" I wanted to offer a legitimate data point for funds that have large, stable capital bases and routinely recruit analysts.
-There are always going to be outliers to the upside. If you worked at Adage in 2014 or Appaloosa in 2009 (or any year really) the numbers are going to be off the charts laughable.
-At small funds the numbers are going to be in line with the WSO compensation report. 90%+ of launches in the last 5 years do not start at 2/20. Its more like 1-1.5% with a hurdle, high water mark, and 15-20% incentive fee. At $300mm if a fund has a decent size staff the founders are not making much at all on the management fees. Unless there is an incentive fee bonanza they are not going to pay a 25-28 year old a boatload of cash.
-After year 2-3 post banking there is going to be so much variability at an individual level that even if you narrowly defined the universe of funds (L/S GARPy funds based in the US with a lean staff and $5bn-$15bn AUM) that there is no point in putting up numbers. At that point the performers are going to have a lot of upside and those that aren't really performing will probably be flat on comp or counseled to find something other to do than pick stocks/credits for a living. Maybe @"BlackHat", @"Mr. Pink Money", @"NewGuy" or others could chime in.
-I have no idea what the market is like for people coming out of MBA programs. Very few people that do banking and go to good funds go on to business school. The ones that do and have favorable work references probably get great offers.
I can't speak to all-in comp yet but most of the offers coming out of MBA programs range from $150k-$175k base (I've heard $100k on the low end and $200k on the high end from classmates). There doesn't appear to be much difference between post MBA analysts at a fund vs post banking analysts unless you worked on the buyside prior to business school. My expectation is all-in is probably ~$300k for first year out of school just looking at the base salary of the offers I've seen.
When I came out of b-school a few years ago wasn't the greatest market environment, but bases were 125k-150k range at hedge funds (obviously some outliers which always get way too much attention.) I tried to keep track for first 2 years of base/bonus progression from ~10 analysts (varying geographies, strategies, AUM, etc). And people were generally getting 300k-350k-ish all-in after a couple years, and then there were a few positive outliers. I stopped keeping track because it all gets totally PNL/perf driven pretty quickly. I'm sure the ranges could've been higher if the list were exclusively name brand or large equity AUM funds in NYC.
How do these numbers compare to junior analysts at HY credit funds?
What do analysts beginning at the megafunds like Viking make all-in?
If you have to ask...
Sorry got the message from above posts. Heard anywhere from 500K to 1m but I guess it really depends on the fund and individual's performance
If he's talking someone who has spent several years at a large fund post-IB and performed well, then it's a reasonable range. For 1st year analyst post-IB at a "top" fund, somewhere in the $300-400K range should be expected. Eton Park, etc. But not many of those jobs to go around.
I would also like to add that if you start off at a hedge fund with little no no PnL risk, your bonus will likely be a multiple of your base, anywhere from 0-1.5x depending of how good of a year you have.
SumZero just released a good report on hedge fund comp data they collected: https://sumzero.com/sp/2015_SZCompReport
It's much more rare than people think to make $500k+ at somebody else's hedge fund. The number of guys making $1m or more with an analyst title is exceedingly slim. A non-founding analyst who achieves a "partner" title at a top L/S equity fund is unlikely to make more than $2m in a normal year (excluding compounding on their own investment). Frankly your value to the founder of the fund is determined by your replacement cost, and you can get a whole lot of smart people to competently research trades for you for much less than $2m. Also if you do manage to build an alts business with some real AUM, it's a bit of a land grab to see how much personal wealth you can accrue as fast as possible, as the morbidity of even established hedge funds is so high.
There are of course exceptions and pre-crisis this wasn't so much the case. But yea... there is really no free lunch. You wanna make $500k - $1m reliably for your whole career, go become a surgeon
Thank you for adding some substance to this conversation @RLC1 - this is very useful.
I'm a little confused here. Let me know where I'm off base, and I'm generally referring to top tier hedge funds... the ones you would go to if you're on a a top tier BB to a top tier PE to HF track.
The titles I'm refering to are defined as follows: PM, Senior Analyst, and Analyst. Founder PM is exactly what it sounds like. PM is a partner level guy who runs his own book. Senior analyst is an analyst who has shown promise and hasn't gotten churned out after his first few years there. And lastly....
An Analyst seat is not entry level, but a post-top tier PE seat. Again I know they vary to a large degree, but just wanting to be clear of what I mean when I use these titles.
As an Analyst, the post-PE comp is in the range of $400-600k. I don't understand he "exceedingly rare to make over $500k" comment. MF Comp for a second year associate is something in the ballpark of $350-450k. If you had a 3rd year associate offer on the table, that comp package would be in the $400-500k range -- this is what you would weigh a HF offer against on an apples-to-apples basis. I've always heard that HF gigs are even more attractive than a partner track PE gig. But that notion is not at all consistent with your $500k+ is rare comment.
My understanding has been that after your PE stint, if you make it to an elite HF, you can expect to make somewhere between $400-600k (that is a broad range, even though it may not seem like it). Within a year or two, you should be generating ideas and may be putting some money on a few of them under the sponsorship of a PM, or at the very least, in addition to your regular responsibilities you're also running a mock book before you're given P&L. After a few years of this, if you're good enough and have proven a reason for you to exist, you haven't burned out, the markets haven't gone to shit, your fund hasn't blown up, and there is organizational room for you, you'll graduate to a Senior Analyst position where you'll generally be making somewhere between $600k-1.5m. Again, if I comp this against where you'd be in PE had you stayed, you'd be approximately at the Principal level and would be making close to if not more than $1m. I'm sure you noticed all the IFs, this suggests to me that you should make more at a HF given the higher degree of uncertainty versus a role of the same tenure at a PE firm, and so my comps numbers seem directionally accurate.
What I've always heard (and to some degree seen) is HF > PE > IB and the best bankers can graduate to PE and the best PE guys can graduate to a HF. So its hard to believe that a above average banker would make about the same as a HF partner (i.e., ~$2m per year). Also, the jump in level of intelligence from Banking to PE is astronomical, in my opinion. Banking is idiots abound, PE is the complete opposite. To think that a $2m/year banker and a PE or HF partner are interchangeable is definitely not true IMO. To say a PE Partner and a HF Partner are interchangable, I don't really have the experience to know, but I'd speculate it is a slight difference. And like anyone performing at an elite level, when someone is a tenth of a second faster on a lap, its a marginally insurmountable difference. That combined with the higher volatility in HF, would suggest that MF PE partner -- who's making somewhere in the range of $3-5m per year -- is (a) not as smart and (b) would demand more money given the higher volaility at a HF. For either and both of these reasons, I have to believe a non-founder HF Partner is making at least $3-5m per year. I'd venture to say that they're making substantially more than that, but averaged in with down years, it ends up being more over the long run but not by a very large multiple.
Back to the junior level, I have a relatively small sample size, but the few friends I know at HFs have gone to top tier shops after their PE stint and the low end was a baseline targeted $350k all-in comp package at a few billion AUM fund varying to a $500-800k range at a Tiger Cub.
Anyway, those are my few datapoints / triangulations that make $500k as being aspirational and $2m as being a ceiling in the HF world seem like very low expectations. And again, I'll caveat with the fact that my PE reference is the megafunds and hedgefund references are where a megafunder would seek to go (an elite HF).
Bold added for emphasis.
No further comment.
Thanks, this is helpful. Sent you a message.
The gap between my performance and low-comp is absurd. I am getting out of here so fast...
Thanks internet!
The gap between my performance and low-comp is absurd. I am getting out of here so fast...
Thanks internet!
^ Way too many generalizations. Read about multimanager vs. 1 PM model.
Hard to guarantee step up salary from megafund PE.
Most take a hit.
You add 0 value a HF vs. someone who went analyst > HF. HFs don't give a crap what you did before and they know you are screwed because a 2nd year megafund PE is not getting promoted internally and his only option is lateraling down to a mid size PE firm or going to bschool.
No one is thinking "oh crap let me throw money at this PE dude 'cause his 2 years is up!" If anything it's "hey ur 2 years are up, convince me why I don't just take this hungrier and younger 1 year GS/MS/BX IBD analyst instead?" Most HFs take IBD analysts for this reason. Less bad habits to unlearn and kids are hungrier on average.
Your ranges are possible but way too narrow. Try $200k to $600k range as an analyst. Tiger model is all about mentor/mentee and being in the ship together. If you don't clear fees, you won't get much.
Your caveat pretty much answers your question... You are basically saying, "if we take only the top guys from the top schools who were also top in their banking program and then top in their PE program and move to a top hedge fund, then making $500k as an analyst isn't exceedingly rare." And then you're saying "if we take the guys in a seat at a top fund that kick ass for a few years, it's not uncommon to see comp in the $600k - $1.5 million range at the senior analyst level."
I agree with those statements. But you're talking about, I don't know, 0.5% of people who enter the hedge fund industry? Maybe less? The Harvard -> GS TMT -> Apollo -> Third Point et al -> Career advancement at Third Point et al is very far from the typical path. If that's you, great; you can go kick ass at Omega or Greenlight or wherever, top out at 2 bucks on an average year, quit, and launch Colonel's Capital with a $250m seed.
The rest of this I just don't have the time to reply to right now.
So you're saying that at Greenlight/Viking/Omega etc. you plateau at $2 million a year? What's your basis for that claim?
I think you are overly worried about comp for a position that most are unlikely to ever reach.
There is absolutely no hard cap on how much you can make in a year. From what I have seen typical comp structure if you are a PM managing $X is a fairly modest salary and a percentage of incentive fees. I'm sure that percentage can vary quite a bit depending on how indispensable you are/become and obviously comp then depends heavily on your performance and assets in your book. Whether or not your fund has this exact structure and the degree to which non-founders are compensated will obviously depend on the fund. There is only one Seth Klarman at Baupost but that degree of concentration in managing the portfolio could be different elsewhere.
My basis for that claim is multiple personal relationships with people currently/formerly in those kinds of seats at single manager funds. Obviously there is no rule that says you are limited to annual COLA after $2m, but that seems to be the high end of the comp range these days for guys with partner titles who are really just tenured analysts at big/"elite" single manager L/S equity funds. You can feel free to disregard this if you so please; after all, I am ultimately an anonymous person on the internet, working with imperfect information myself.
If you choose not to disregard, I would simply reiterate that your value to an alts firm is dictated by your replacement cost. There's just not a lot you can do as a journeyman equity analyst to make yourself worth 4x a guy who does the same thing as you but is a little bit younger. $2M is a tremendous amount of money for performing a commoditized service like stock research without taking any entrepreneurial risk btw... CEOs tend not to make that much reliably until they're running $50m+ EBITDA companies, and it's a heck of a lot harder to do that than it is to buy cheap stocks. There's a reason senior analysts leave these firms all the time to take a run at their-own-name capital management with a sub-$100m launch.
The broader point I was making above is that if you destratisfy the market from the top 1% of hedge funds to work for, you are left with an industry of pretty smart people who are earning on average way, way, way, way less than people on this board (and elsewhere in society) seem to think.
Worth noting there are ~7,000+ hedge funds in the U.S. The $300-400 range I threw out earlier in regards to 1st year comp (post-IB) seems in my experience to be applicable to most of the "elite" HFs [admittedly, based on a low sample size]. But these funds are very much the "1%" of the hedge fund world in terms of the magnitude and steadiness of fees, and thus the magnitude and steadiness of comp at the junior level. There are very few of these positions to go around even in comparison to MF PE. HFs, with rare exception, do not churn post-IB analysts in the way that private equity firms do. This means there are fewer positions but good performance brings the possibility of quicker advancement without going to b-school.
my general impression is that while the numbers being quoted aren't crazy, they're probably a bit high (in terms of progression and also in terms of variability), and also tend to ignore the fact that analysts get blown out all the time and then end up making substantially less at their next fund. at least a few tiger cubs I know of have analyst programs that are well paid but then the vast majority of analysts are asked to leave after 2-3 years BC it's like a pre-mba program.
it's very tough to get to the 2mm plus level in HFs because there just aren't that many of those seats to go around. for example, if you are a sector head at a big long short fund, can you make that much or more? sure. but there's only one sector head per sector...all the other analysts work for him/her, and they're not all making that much money (because most of the ideas and risk management is originating out of the sector head, so they are the ones who get the lion's share of the comp that doesn't go to the PM).
To corroborate the analyst to PM promote that does happen at multimanager funds with relative frequency:
http://www.bloomberg.com/news/articles/2015-01-27/point72-s-braunstein-…
“Roughly three fourths of our portfolio managers are now homegrown and in the past year, alone, eight analysts have been promoted to portfolio manager, with others in the pipeline.”
There could very well only be 8 PMs at the artist formerly known as SAC. In which case they have 2 homegrown PMs, great.
Next, I think the more appropriate stat would be Homegrown PMs divided by total Non-PMs hired from the time the first home grown PM was hired into whatever role it was when he entered SAC. The stat they give is misleading and probably intentionally so.
Um...sorry to burst your bubble, but:
http://www.marketwatch.com/story/steven-cohens-point72-earns-big-2014-p…
SAC is still killing it. 9bn in AUM and 3bn in trading profits...that means this year they are probably starting around 10-11bn in capital.
And if your point is that most analysts do not get promoted to PM internally...no shit. I don't think anybody is claiming that they do. Only the potential all-stars get that nod. But at SAC there are definitely a lot of internally promoted PMs.
double post
Compensation risk at hedge fund? (Originally Posted: 08/20/2006)
Wondering how much of the bonus would be tied to the fund's performance for someone coming right out of undergrad?
not much probably.. although it definately helps.
posted twice by accident
Compensation at Hedge Funds (Originally Posted: 11/04/2006)
What is the expected compensation of a research associate at a Hedge Fund?
100k+bonus based on the performance of the strategy. bonus will be determined by the portfolio manager.
agreed
agreed
I thought bonus was determined based on P&L
what others said.
I've heard of lower ($80K) plus bonus at large, well-repected funds
agreed
I've heard of higher - $125K + bonus, depending on your P&L.
My cousin works at a currency trading hedge fund in NY, right now he's 3 years out of UG at Wharton.
Base pay is 80 K He gets a semi-annual bonus which regularly tops 100 K. Last year, all in was about $400 K.
According to your post that would be 280k, not 400k.
at a minimum thats 280K, but he probably gets 150-200K semi-annually when the the fund is up and he has been responsible for some of the profits. This isn't banking where bonuses are within a 5% band
Ah, i read that his "bonus tops out at 100k." My mistake.
what would be the compensation range for first year analysts/associates/
first year numbers sound about right (250kish) but it is way harder to get into the 7 figures without running risk then seems to be consensus here (at least at a multi-manager). A star late-20s analyst may make 500k+ but these are "up or out" jobs...in five years either they will be making huge money as a successful PM, they will be elsewhere (often not in the hedge fund industry due to burnout or inability to get another job), or they will be making about the same as they were five years ago as an analyst. Generally "career analysts" never make it anywhere near the 2MM level unless they are running the whole research department or were an early partner.
HF analyst ....Compensation and travel (Originally Posted: 01/20/2008)
How much can 1st-2nd year analyst in NYC/Greenwich who made the leap from a top BB into a reputable top 25 hedge fund? base? bonus? I know there alot of variability but ballpark?? and travel...how often do analyst at HF travel???private jet??
I have one friend that just left a top BB after 1 year as an analyst and joined a top HF with 125k base and bonus very largely dependent on the performance of his investment ideas. So if he's good (and he is), he'll likely be laughing.
has £75 base, and likely the same again in bonus in his first yr.
SAC is a very special situation due to their recent upheaval. They currently offer way above-market pay-outs for PMs and likely are quicker to promote from within simply because they are "rebuilding their roster". Generally, at large multi-managers Analyst to PM promotes are very hard to come by although they have gotten slightly more common in recent years simply because the sell-side no lonmger is creating traders with real track records of risk taking. The analysts are generally all very smart, all highly credentialed, and they all want to be PMs...on the other side of the equation no principal wants to tell investors that a young guy who they were giving his first shot to run money lost a bunch.
Value Hedge Fund Compensation (Originally Posted: 04/01/2010)
I am wondering what the average compensation is for analysts/portfolio managers,etc. in value and special situations hedge funds (no quants). Obviously, an analyst doesn't make as much as a portfolio manager, but I am after what a typical pay progression looks like assuming one is successful. Do the largest hedge funds of these kind (AUM) hire, and do they let individuals with experience manage a decent chunk of money? I guess I am looking for a synopsis of what could be a possible series of job outcomes in this particular sector of the hedge fund market. Right now I am investing my own funds using a valuation methodology, and would really like to pursue this professionally: read SEC reports, give my advice, and eventually manage big bucks or assist in the endeavor. If anyone with relevant experience could comment, that would be great. Also assume that I am at a school in which landing this kind of job is a possibility.
Analysts are not your typical analysts by bulge bracket standards. The analysts at hedge funds are typically in their thirties or have had significant amount of experience within the industry before. I know personally an assistant portfolio manager at a high income fund come in as an analyst at a hedge fund this may be an aberration but if you look at some of the profiles they have MBAs and significant experience.
too large a variance for any "averages" to be meaningful
Hedge Fund Analyst Compensation (Originally Posted: 05/24/2011)
I've just accepted a new job as a credit analyst at a $2bn+ hedge fund. I've spent the last three years at a BB bank but have decided to make the transition to the public markets side. I have no idea what to expect for all in compensation. I'll be getting a base salaray of $110k but wasn't given an indication on what bonuses are like. Any thoughts? Ranges?
Depends a lot on the fund's structure and performance, and how generous whoever decides your number is. Some places in that size range will have PMs running capital independently or have multiple desks for different strategies/industries/asset classes, others will be more centralized/generalist. If your fund is set up as a multi-fund or multi-manager structure your bonus pool may be determined solely or mostly by your team's performance. Regardless of structure, you're at the whim of what your superiors decide you're worth. If I had to guess a range I'd say 20-150% of base assuming an up year with incentives being earned. Sorry if this is too wide to be helpful but the reality is no one can predict the inputs to this-best source is someone with longer tenure at your fund who you feel comfortable asking.
Here's a thread that emphasizes how cutthroat/volatile compensation can be: http://www.wallstreetoasis.com/forums/hedge-fund-compensation-in-a-bann…
Awesome link, once again, thanks for the info Kenny!
PM'ed you.
HF Compensation (Originally Posted: 03/25/2014)
Hi all.
Wondering about HF bonus compensation. Fund I work for is quite profitable this year, PM gets 10% of net profit and I guess he will decide how much to give us analysts (we are three, relatively new with same experience.
Anybody know what is normal % for bonus?
Thanks
That's actually quite a small cut for a PM to take. So assume your team is managing $100 mm and the fund was up 25% that year. Your fund would receive 20% of the $25 mm as incentive and 2% of the $100 mm as management fees so that's $2 million + $5 million for a total of $7 million. Assuming that you're running a 2/20 model which is rare these days. So if we is taking 10% of profits he's only getting $700k in a pretty damn good performance year. Typical PM contracts are cut higher than that in my experience unless I misinterpreted this.
My thoughts exactly. Are we missing something OP?
I'm guessing the PM gets 10% of the net profits, or half the carry assuming a 20% incentive fee. Three analysts splitting the other half is still pretty generous.
Gray Fox, you are correct. The 20% performance fee is split 50-50 between CEO and PM.
So, to use madgames example, the performance fee for the PM (the fund he is managing) would be $25m20%50%=$2.5 or $25m10%=$2.5 which yields the same answer. (I have here assumed $25m is net of 2% mgmt fees, if it is not the performance fee would be $25m - $2m=$23m10%=$2.3m)
On this $2.5 cut would you think the split would be between the PM and the three analysts?
Madgames: Yes, it is run using 2/20 model. Your calculation is wrong as it is quite normal in the industry to calculate net profits, i.e. the performance fee is calculated net of profits (profits minus 2% mgmt fee).
You're not going to like this answer, but the way it works at a lot of funds is that incentive fees go only to partners - those with either equity ownership in the business or contractual "points" in the carry. Sounds like PM and CEO each have 50 points and the rest of you have nothing guaranteed. In that case, unless they are feeling super generous for some reason and you are extremely lucky and/or irreplaceable, expect all of your comp to come out of the management fee. You don't get carry just because you work at a hedge fund, unless it's in your contract. As a relatively new analyst, you don't typically participate that much in the upside unless you are already very experienced, which it sounds like you are not if you're asking this question.
Now, because the managers are getting paid nicely on the carry, they may not take much if any cash comp out of the management fee for themselves. (Although you never know, maybe it's time to buy a boat this year and stiff your staff. It happens.) In your $100m example, you might expect the 3 of you to share whatever's left of the $2m management fee after all the expenses of the business including your salaries, office space, travel, hard dollar research, etc. have been paid. Low six figures is possible, something in the five-figure range is more likely if you're young.
Thanks. I think the PM will share some profits. Why keep his analysts unhappy?
210981ur09u - Yeah it could be calculated either way. Typically PMs take a much larger cut because they are the ones inherently taking most of the risk. They pay the analysts just enough to keep them there (which can be plenty in a good year), don't want to piss them off or make them too happy at least in my experience. Just don't expect too much upside especially in a junior role
Thanks for comments.
You can find other posts on WSO that describe the profit split between analysts on WSO and their PMs. The quick summary is that the analysts generally expected some type of high-single-digit/low-double-digit % share. They were always given less than that expectation. Frankly, their expectation was not close to correct. You should expect 1-1.5x base salary in bonus, even in a good year. In a bad year, you should get 0.5-1x base salary--with the caveat that you might also get fired in a bad year, regardless of your performance/work.
There are some great posts in these threads about PMs having all the upside:
http://www.wallstreetoasis.com/forums/how-realistic-is-making-500000-a-… http://www.wallstreetoasis.com/forums/seven-figure-salaries-in-hedge-fu… http://www.wallstreetoasis.com/forums/hf-analyst-compensation-and-travel http://www.wallstreetoasis.com/forums/how-is-hf-portfolio-manager-compe… http://www.wallstreetoasis.com/forums/hf-comp-table-h-s
Post IB HF Compensation (Originally Posted: 05/18/2015)
Hey monkeys,
Looking for some advice. Currently a 2nd year IB coverage analyst at a top BB (GS/MS/JPM) with an offer to join a 3.5bn HF. The fund is credit focused. All in comp for the stub and first year is targeted at 190-210k. Is this on the lower end given the fund size? Anyone care to share the normal expectation?
Bump
sounds standard, what's your role?
Investment associate
100 base + 100 bone?
yup, the deviation would be in the bonus
is it a bit on the lower end? yeah maybe, but it's also pretty standard...i'd say anywhere from 180-320 is kind of generally standard. my advice: do not worry about it. do not try to negotiate (this is probably unusual advice -- i would caveat that i would only say this for somebody who's transitioning from banking to a HF, not an experienced professional obviously). just take it (if you like the fund and think it's the place for you etc)
you want to go to the place that's going to teach you to invest the best. once you can do that and start making it rain, either they will pay you, or you can go somewhere and write your own ticket. there is nothing that prevents you from renegotiating your pay 3-4 years in when you've made the firm 8 figs in pnl in a year, and if they're jerks about it, there are a lot of places that won't be.
most important thing is to learn what you're doing though so you can make that happen.
id second exactly what xqtrack said. go for it
What do you mean stub? How many months are in the stub?
Give us the annualized salary and bonus aggregated number for better comparisons...
Meant that there would be no increase in the second year vs. the stub period. I.e. stub year is 190-210 annualized and the first full year is the same range
If you're not negotiating higher (whatever the offer) you're doing yourself a disservice.
that's probably on the lower end but I would echo what xqtrack said. If you like the place and think it's a place where you can learn and grow than taking the discount now could make sense.
What do you think the all-in annualised range is for a first year HF analyst, assuming the fund had an average year? 200-500K?
Hedge funds aren't like bulge bracket investment banks where you have a pretty standard range (especially at the junior level). Range would probably be like $150-400,000 but $400,000 is extremely rare for a fund and may only happen if that fund had an outstanding year. In other words the "average" is not ($150,000 + $400,000) / 2. Most of you kids should be happy with $200-250,000 after 2 years in banking and focus more on learning rather than on making as much money as possible. That will come later.
Seems in-line, I'm headed to a $4bln credit shop and it's 120 + 120 (with the stub year arrangement as well, but they're open to negotiations beginning my first full year). I didn't renegotiate, I mean it seemed like a fair offer to me. Later found out through the recruiter that they (the firm) told him my non-negotiation affirmed what I had been saying through out the investment process that I was more focused on the learning and the money would (hopefully) come as I grew older. The vibe I got from this fund is if I'm good they'll pay more, if I'm not I'm going to flat line. Seems fair to me.
Analysts with with 3-5 years of total post-undergrad experience should expect anywhere between 120-150K as a base salary with 100-200% of their base as a performance bonus (obviously highly discretionary depending on individual and fund performance).
This was discussed in depth in January. I offered my thoughts then and generally stand by them despite the backlash.
http://www.wallstreetoasis.com/forums/hf-analyst-compensation
"I would say base is going to be 100k-150k with all-in comp in the 250k-350k range. 2nd year all-in would be in the 400k-500k range. After that, variability is going to swing widely. If you are a top Tiger fund or one of the really high profile places it is going to be higher, if you are at $2bn fund with ok performance and a 1/15 fee structure it might be less.
The HF analyst space is not as uniform as the post banking megafund PE space but the two are competing for the same pool of candidates. It is a LOOSELY efficient market and pay will be similar"
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