Career at $2-4B fund

At a $2-4B hedge fund with ~10 people, here's what you need to know based on the most helpful WSO content:

1. Career Progression at a Smaller Fund

• Career progression at smaller funds is often less standardized compared to larger multi-manager pod shops.
• Many people at smaller funds come from research backgrounds (internally or externally) and transition into more senior roles like portfolio managers (PMs) if they perform well.
• Smaller teams mean fewer layers of hierarchy, so you may have more direct exposure to decision-making and portfolio management early on.
• If you're good, you could either branch out on your own or wait for opportunities to take on more responsibility as the fund grows.

2. Compensation (Base/Bonus)

• Compensation at smaller funds can vary significantly based on fund performance, culture, and the manager's philosophy.
• Smaller funds often run lean, which can mean higher compensation per person if the fund performs well. For example, a portfolio manager at a $1B fund might earn a base of $250k with bonuses ranging from $500k to $3M depending on performance.
• Junior roles at smaller funds might not pay as much as large pod shops initially, but the upside can be significant if you’re part of a high-performing team.
• Larger pod shops, like Citadel or Millennium, tend to have more structured pay scales, with first-year associates earning around $191k on average, and senior associates or VPs earning significantly more.

3. Long-Term Trajectory and Learning Opportunities

• Smaller Funds: You’ll likely gain broader exposure to the entire investment process, from idea generation to execution. This can be invaluable for developing a well-rounded skill set.
• Large Pod Shops: These tend to be more specialized, with analysts focusing on specific sectors or strategies. While this can limit your exposure, it can also make you a deep expert in your niche.
• Smaller funds often provide more entrepreneurial opportunities, as you’re closer to the economics of the fund and may have a chance to share in the upside if the fund performs well.
• Larger pod shops, on the other hand, offer more stability and resources, but the competition is fierce, and the environment can be more cutthroat.

4. Trade-Offs

• Smaller Fund Pros: Broader exposure, potential for higher upside, closer relationships with senior team members, and more entrepreneurial opportunities.
• Smaller Fund Cons: Less stability, potentially lower initial pay, and fewer resources compared to large pod shops.
• Large Pod Shop Pros: Structured career paths, access to significant resources, and potentially higher initial compensation.
• Large Pod Shop Cons: More competition, less exposure to the full investment process, and a more rigid environment.

Ultimately, the decision depends on your career goals. If you value entrepreneurial opportunities and broad exposure, a smaller fund might be the better fit. If you prefer structure, resources, and stability, a large pod shop could be the way to go.

Sources: https://www.wallstreetoasis.com/forum/hedge-fund/the-hedge-fund-experience-good-bad-ugly?customgpt=1, 7 Figure Hedge Fund Salary - Myth or Real?, The Hedge Fund Experience - Good, Bad, Ugly, What I've Learned About Hedge Fund Structure and Compensation, What I've Learned About Hedge Fund Structure and Compensation