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Based on the most helpful WSO content, here's what you need to know:

For a fund with a 1.5% management fee and 20% incentive fee structure, the compensation for a first-year analyst can vary significantly depending on the fund's size, performance, and assets under management (AUM) per analyst. Here's a breakdown:

  1. $200 million per analyst:

    • Assuming a 1.5% management fee, the fund generates $3 million in management fees.
    • If the fund achieves a 20% return, it generates $40 million in performance fees (20% of $200 million × 20% return).
    • Total fees available: $43 million.
    • After accounting for costs (typically ~40%), the remaining pool for compensation is ~$25.8 million.
    • With fewer analysts, the compensation pool per analyst is higher. A first-year analyst at such a fund could expect $200,000 to $400,000 all-in compensation, depending on their involvement in the investment process and the fund's performance.
  2. $400 million per analyst:

    • With a 1.5% management fee, the fund generates $6 million in management fees.
    • If the fund achieves a 20% return, it generates $80 million in performance fees (20% of $400 million × 20% return).
    • Total fees available: $86 million.
    • After costs (~40%), the remaining pool for compensation is ~$51.6 million.
    • With more AUM per analyst, the compensation pool per analyst increases. A first-year analyst at such a fund could expect $300,000 to $500,000 all-in compensation, again depending on performance and their role.

Key Takeaways:

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Regardless of the AUM/seat, 1st year comp will be soft capped. It depends on where you're coming from. If they are hiring you after 2 years of PE then expect $200k>=Base=(less than)$300k. If they're hiring you straight from IB then $150-$200k. Again, it depends on how much they liked you when interviewing you.

If it's a pod then comp will be structured and you can find what to expect on here. If it's SM which I think it is because AUM/head is irrelevant for pods, then it's totally based on the manager and should be similar to the numbers I quoted above.

If it's a great year you can expect anywhere from 100-200% of base, again it's at your PM's discretion. Since you're new to the firm they won't be raining profit onto you even if you contributed to the PnL significantly. Can say from 1st hand experience as I'm in a similar seat.

 

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