I’m working at a large ($3b+) single manager set up with multiple PMs. I have a carve and also feed ideas into my PM’s book. My slope is about 2% on my ideas in my PM’s book and 4% in my carve. I feel very underpaid. Any feedback on whether or not I’m being unreasonable with thinking I should be at A 3%+ slope on ideas in my PM’s book and 6%+ in my carve?
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Based on the most helpful WSO content, your concerns about compensation and slope seem valid, especially given the benchmarks discussed in similar setups. Here's a breakdown:
Slope on Ideas in PM's Book (2%):
Slope in Your Carve (4%):
Negotiation Considerations:
Ultimately, your expectations align with what others in similar roles might aim for, but the feasibility of achieving these slopes depends on your firm's structure, culture, and compensation philosophy.
Sources: Crazy to take MM offer if lead analyst in ER?, Reflections from year 4 as an equity analyst, https://www.wallstreetoasis.com/forum/hedge-fund/the-hedge-fund-experience-good-bad-ugly?customgpt=1, Reflections from year 4 as an equity analyst, Updated 2022 S&T Compensation
The % on your carve would definitely be low at a multimanager. You don't specify whether you're getting a discretionary bonus or such, which would obviously matter.
Depends on how much factor/beta risk you can take. If you can own $200m of NVDA and get % of PNL that’s diff than if you need to hedge industry and factor
Congrats
Wouldnt compare the slope for a concentrated long biased book to a pod esp if its pajd on pnl and not alpha
Are you charged research expenses and is borrow / rebate included?
A $1bn GMV pod w/ 4% vol and a 1.25 sharpe is looking for $50m PnL * 20% = $10m bonus minus expenses, PM takes half, minus expenses, $5m to go around 2-4 analysts + netting risk
if u make 800-1.3m in a decent year and don’t have to worry about blowing out every week, it’s probably marketish for an ok $3bn traditional fund
The dirty secret is alot of $3bn traditional LS funds have some legacy seed deal taking a big chunk of the GP profit and paying discounted fees, or a giant long only book w/ a non-2-and-20 fee structure and a small L/S book with a large of non-fee founder-money it
If none of this applies to you then disregard, but grass is always greener
agree with @Anchor . in my experience the ballpark comp goalposts are 5-10% of P&L at a multi manager and 2-3.5% of P&L at a SM that is directionally net long with looser risk limits, with the upper end of both of those ranges being quite rare. don’t have a good perspective on what % of your carve you should get, but my fund (similar size / model) historically has been ~2% of P&L. as far as % of P&L in your PM’s book, recruiters tell me 2.5-3.5% would be more “market,” but at a certain point most funds will cap you out at marginally more than the bid you’ll get elsewhere
Sorry, dumb question here. 5% to 10% of the total pod PnL or 5% of 10% of the PMs total available bonus pool?
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