Those in hedge funds / trading houses, what was your compensation progression?
Would appreciate some insights into comp progression for roles:
Base/Bonus/Variable Comp
| +24 | How to break into tier 0 shops/funds like Rentech/XTX | 7 | 1h |
| +11 | Should I get an MBA for VC after Tech PM? | 2 | 3d |
| +9 | Stay or leave? | 1 | 3d |
| +7 | Tips for breaking into Macro RV? | 3 | 17h |
| +6 | Lateraling to MM L/S | 1 | 5d |
| +5 | Citadel Pitch Comp | 2 | 1d |
| +4 | Q&A: From IB to HF in London to LO in Dubai. | 3 | 2h |
| +3 | Jain | 1 | 2d |
| +2 | Top Books for Hedge Funds Today | 4 | 2d |
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Y1: $56k/6k = $62k
Y2: $58k/7k = $65k
Y3: $97k/25k = $122k (switched jobs)
Y4: $102k/34k = $136k
Y5: $105k/55k = $160k
Y6: $105k/$150k = $255k (switched jobs)
Trader
He asked for "high-finance"
Y1: 100k
Y2: 120k
Y3: 80k
Y4: 80k
Expected Y5: 50k
(adjusted for inflation)
were you janitor at GS?
12 yoe, 10 yoe buyside
Total comp
Yr 1-4 = $250-600k
Yr 5-8 = $1-3m
Yr 9-10 = $7m / $300k
Year 9 was top decile year. Year 10 was terrible.
L/S? SM or MM? Would appreciate some details, thanks
I’m assuming this is MM. were you given a sleeve for years 5-8?
Yes MM. And yes to sleeve.
What’s a sleeve?
RelVal in terms of fundamental credit or are you more quant driven?
L/S equity at an MM platform
Is comp at MMs deferred at all ? And presumably its taxed as income with no PE-style capital gains treatment?
cash/taxed is the default.
Citadel defer up to 35% but most ppl would take that over cash anyways since u get access to kesing/wellington
What did you do on your 2yrs on sell side. Trading?
No
You can’t do L/S equity investing in almost every shop after S&T.
Most people in my seat did IB, PE, or ER before jumping over.
Making 1M 5 years out of Uni is insane
Did you start in HF? or did you go from IB? Curious what you did
2 years in ER.
The comp history above is excluding my ER days (hence 10 years, not 12 years).
Hey there, 3 very specific questions, thanks! I'm a senior analyst at a big SM thinking about going to a MM, so I have a few questions about pod economics. It's a big switch for me and I've recently been thinking a lot about it, I'd really appreciate any help with the below:
1. Re Yr 5-8: How do sleeve economics work? Assuming $200-500m sleeve, 2-5% return on GMV, and then what is the cut of pnl? If you made a $2m bonus, at a 5% cut = $40m pnl (seems super high / impossible on a 200-500 sleeve). Something like 7-8% cut? Does it range MM to MM and pod to pod? Would appreciate any info on citadel if you have (a buddy of mine mentioned their pods and sleeves for analysts are bigger than all other MMs). Thinking about leaving current shop / want to get high level understanding of sleeve economics. Also, can you take a tilt in your sleeve (and therefore get return on GMV > 2-5% since u wouldn't be mkt neutral if u had a tilt -- some of this would be beta; how does that work with pnl / comp)
2. Re Yr 9: Huge year congrats. I'm assuming as a new PM, a $7m bonus looks like: $1-1.5bn book, 5-7% return, 15% cut (using mid-point of AUM and return) = $75m pnl, $11.25m bonus pool, pay analyst + jr analyst + whoever + overhead for bbg, meals, trips, alt data etc = $4m, then you keep $7m? How much of the 7m was deferred roughly? Also, is it just "hey if you generate $XXm of pnl as an analyst or put up x% on GMV as an analyst, we'll make you a PM?". Or some other path? Are the above terms "fair" for a new PM at Citadel / MLP? I believe average book at Citadel is $2.5, so $1 seems like it'd make sense for new book +15% cut for new PM
3. Re Yr 10: After a big year 9, did they give you a bigger allocation and bigger cut of pnl (what was the magnitude like roughly, 1.5x for aum and like 200bps for cut?). After a bad year 10, did they take back allocation and cut gain from previous year?
Pretty similar story for me at a SM actually (I work on quant strats):
year 1-5: 250-500k, no significant pnl linkage, just steady growth
6-7: 750k, 1.25m, some pnl responsibility
8+: ? Depends mostly on pnl
What products are you dealing with mostly?
is this a quant shop where quants run the show or are you support for a fundamental PM?
I am not support for a fundamental PM - our structure is a collaborative (mostly quant) team building strategies together. I guess this is closer to "quants run the show" at least for the group of strategies that I work on.
4 years
year 1 - 3 - 200k - 350k
year 4 (2022) - pnl linkage so will start to swing wildly. we'll see for this year.
1: 72k Corp job
2: 86k shitty ER
3: 176k BB ER
4: 200k buyside
2.5 YOE, all buyside SM HF L/S joined out of school
Y1: 170k (June start)
Y2: 370k (70% bonus, some PnL link)
Y3 (this year): expecting 400-500 AI through PnL link but may be lower depending on fund's 4Q performance
NYC based?
What l/s SM hf did you find out of undergrad?
AUM range?
General Tier 1 Prop straight out of undergrad, this is all in as base doesn't change much. Gained PnL responsibility rather quick:
Y1: 100k
Y2: 400k
Y3: 1m
Y4: Expecting between 1.4-1.9m
What is your base salary most recently?
wow...how many hours do you work a week?
also curios
Is this US? I can't think of any "tier 1" prop firm that only pays 100k y1. Not even belvedere or CTC are that low...
New traders 4-5 years ago didn’t have it as good as the new traders nowadays…
Y1: 0 (failed startup lmao)
Y2: Expecting ~£190k Jan-Jan period
Y3: Been told bonus share from Jan nxt year, expecting ~£270k for average year of company performance
What kind of shop are you at if you don't mind? T1/2/3 etc?
Difficult to say, never been mentioned on this site before & ultra secretive. Makes couple 100 mil / year, couple 100 ppl work there, couple ex Optiver/SIG ppl knocking around, by far the largest entity in our specific product, owner is a billionaire who owns some sports clubs etc etc.
But raw calibre of people and comp not quite on lvls with the likes of JS so I'd say ~T2.
Did 1yr banking and moved to pod
Y1: 200k
Y2: 300k
Y3: 375k
Y4: 800k
did you get a sleeve in year 4? Damn this site underestimates MM comp
Semi autonomy in Y3 and proper sleeve in Y4. Y5 Looking like a 3-400k year unfortunately. Probably won’t get fired. Seen lots of teams cut. Just part of the game.
Do you mind if I PM you? Curious about how you transitioned after a short stint in banking
As you can see, wasn’t in a HF early on…
Yr1: $45k
Yr2: $55k
Yr3: $75k
Yr4: $105k (switched jobs)
Yr5: $125k
Yr6: $160k
Yr7: $250k
Yr8: $375k
Yr9: $600k
Yr10: $850k
Yr11: $1.4mm (moved to a lot more PnL based)
Yr12: $2.2mm
Yr13: $1.8mm
Yr14: $5.5mm
Unreal. Any general tips for those trying to have similar progression as you?
It’s a combo of luck and skills (although I do believe you can make your own luck in a way). As you can see, my career was a bit of a grind and I didn’t get to the big $$ until later. Outside of being good at your job (obvious…) when I was breaking in I 1) always asked questions and tried to learn as much as possible 2) never had a job that was “beneath me”, I jumped at almost every opportunity possible and 3) I found mentors that were going to help me (and show me where I was struggling) but also advocate for me and give me the opportunities I wanted. Honestly, having struggled early on made me much more driven but also didn’t make me scared to fail, and I think that helped.
Wow, well done. Similar situation with the mentors and grinding and all that good stuff. Started with 2.3 college gpa, no finance degree, fired from multiple jobs or not given opportunity to extend temp contracts that I was in. Worked in back office and other non-investment analyst jobs early on then started inching toward equity research.
Now 10 years after graduating college, i am at a 400aum HF with 125k base, 50k bonus on personal performance, + discretionary bonus depending on sleeve performance.
scared to fail is probably the key here. I was scared to fail and didn't join a HF when I had the opportunity. now I am thinking of it every second. it is just crazy
.
Ops at Credit Suisse
If you’re looking to earn & learn about bitcoin trying I recommend Timebrookinvestment .com Do your own researches my refer name is Olson
Year 0.5 SS Research (2021)- 100k (85k base, 15k Stub)
Year 1.5 Moved to Buyside 220k (130 base, 90k bonus)
SM, MM, or long only?
LO
Years 1-6: ER - $80-200k
Year 7: pod - $350k
Year 8: same pod - expecting around $400k
How have you enjoyed the pod experience? Do you see yourself spending your career there?
I enjoy it more than ER definitely though it’s more work and more stressful. ER was kind of a boring job after a while. It’s very team dependent as everyone says - I got pretty lucky to land on a top team with pretty good culture (very hands off, self driven style). I’ll definitely stick around for a while if I can
Healthcare investing with an advanced degree background
Y1: 1m (150k base)
Y2: 1.5m (150k base)
Y3: 1.75m (150k base)
Y4: 1m (165k base)
Y5: expecting 1-1.5m
Top-20 hedge fund with multi strategy approach
bro is warren buffet
by multi strat do you also mean multi manager platform?
These are crazy, PM? How much aum
ok jim simmons
When I started the buy side role, I was 31yo but this was my first buy side experience. I have an advanced degree and 5 years work experience in management consulting.
Would be interested to see the progression for anyone from a 2+2 >> SM L/S background
Y1: $17hr (FoF temp)
Y2: $55k+$5k (FoF)
Y3: $70k +$30k move to boutique HF
Y4: $75K+ $160K
Y5: $80K +$135K
Y6: $90K + $350K
Y7: $150K + TBD ($500k est)
what kind of hours do you work?
The standard 8-6 most days
Comp only on the buyside:
Y1: $250K
Y2: $400K
Y3: $650K
Y4: 350K
Y5: $1.5M
Y6: $350K
Y7: $850K
Y8: Expecting like $400K this year lol
Thought hedge fund partners would make atleast a million even in down years
Is your fund down a lot?
.
.
lol at ppl thinking u can get paid 7figs easily in a down year (don’t even talk about big down year)
He's a partner not a random analyst, at least that's what his profile says. At most funds in the multi billion dollar category these people have a comp floor which is in the 7 figures paid from management fees. So I'm not sure what the fuss is about
At large firms partners will generally have floors around there or even higher. That being said, as a partner a down year means 1) you get paid a lot less than normal and 2) you are below your high water mark so big paydays are further away and then the big thing 3) your fund starts becoming a risk since people may pull capital and then those nice management fees go away. So it isn’t a fun situation to be in, but 7 figured in a flat/down year is “normal” (when narrowing your sample to large funds and the top people at them)
what company?
2y banking + 5y buyside (credit / distressed):
y3 (first year on buyside): 325k
y4: 425k
y5: 600k
y6 (performed in-line to HFRI distressed): 800k
y7 (performed slightly better than HFRI distressed index in 2021): 1.2mm
y8 (this year): expecting 500-800k given were down YTD
Nice, sounds like a decent seat, same firm entire time? We talking big institutional credit fund with a 10bn+ AuM across a few vehicles or a smaller leaner credit fund?
at a smaller fund (5B)
Excluding my non-buy side years.
Y1 350k (single manager, first buy side job)
Y2 600k
Y3 400k
Y4 ~900k (moved to multi-strat with more direct payout structure)
Y5 >3.5m
Needless to say getting into a seat with a formulaic payout completely changes the game.
That's insane! How many years of workex you had before breaking into the buyside and what did you do before?
Thanks
Was >30 yo in Y1. Spent time in industry, B school, sell side before moving to that fund.
Are you NYC located? Any good tips for compensation/career progression that you can offer?
Not going to answer but location doesn't matter at multi-strats if you are good at what you do.
My advice is to focus on the job and learning how to be a better investor. The money comes fast if you are genuinely good at what you do.
Second piece of advice is that it's way better to focus on less competed spaces. I focus on a space that is undercovered on the buy side and it makes the job a hell of a lot easier than being the 500th analyst at Citadel covering tech. The game you choose to play matters as much if not more than how well you play.
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