What is the expected compensation for someone joining a firm with $40 AUM? What's the ball park?
The firm is seeking someone with 2-3 years of previous experience at a bank or some fund.
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It's going to be considerably less than what you would assume a HF analyst is going to make, but it's hard to give you an idea without knowing the fee structure, how many analysts, etc.
Edit: Also where it is located will be a factor too.
Assuming at standard 2/20 model, the firm will have a total annual operating budget of 800k. Doesn't leave too much to throw around in terms of salaries for jr people, once you consider general overhead and 2/3 senior guys. Though they will need to be somewhat competitive to attract talent. I'd view it more from a long term perspective, ie if it works out and the fund blows up, you'd be one of the first hires which would have potential to pay huge dividends.
Depends how greedy the PM is. I would say base anywhere from $45-60k. No idea about bonus. If you want to get paid right I would say you need each person on the team running at least $100mm.
Is the $40mm friends, family, and partner capital? I doubt any big institutional money would a) invest in a fund that size and b) be willing to pay 2/20 (especially given the downward pressure on fee structure). Any idea if the fund is being seeded by a larger more established fund?
I would negotiate for a low base $60k and a participation in the carry. Otherwise, I don't see how they attract decent talent (with 2-3 years of experience).
Agreed-if they want people with experience they should be offering some real upside-participation. A 40mm fund should be running extremely lean and the number of non-partner employees should be asymptotically approaching zero.
Your comp is gonna be a factor of multiple things but the most pertinent considerations are... 1) Operating budget is not 800k, it's lower. Most small funds offer founding class or friends/family class which charge lower than 2% fee. 2) As others have stated, it better be very lean. At that size I'd hope that it's nearly all founder/friend family capital with only 1-2 senior people on the investment side of things. 3) The location matters a lot. 4) There better be an understanding of when you start to get equity/slice of profits. 5) It doesn't matter how much you're getting paid if you can't get along with them. These are people that you'll be working with day in day out and if the chemistry isn't extremely good things are going to go south. 6) This better be a PM(s) worth working for.
Also: Lower than $60k base if you're in a major city is probably too low unless the perks are ridiculous (doubt it).
Enough to let you eat and have a roof over your head (assuming its not seeded and just building a track record before raising another $100mm+). Your comp is the option value of the funding growing rapidly, make sure there is a either 1) a formal mechanism for you to participate or 2) you trust the PM/partners to take care of the guys who were there during the lean times
Not trying to hijack here but similar question for a 2-3bln AUM RIA. 25 employees and every analyst is a charter holder (this may be irrelevant). They run money for SMA's and are a sub-advisor for some mutual fund products- fee structure is not disclosed. The role being jr. indentured servant
Long track record of success with a recent inflow of assets.
+1 SB. Thanks bro
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