ECM role at HF - how’s the pay?
Contemplating taking a role on an ECM team at a multi-strat HF. Moving from a BB as a 3rd year associate. How is the pay compared to banking?
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Based on the most helpful WSO content, pay at a hedge fund (HF) for an ECM-focused role can vary significantly depending on the fund's size, strategy, and performance. However, here are some key points to consider:
Junior-Level Pay Comparison: At junior levels, compensation at hedge funds is often comparable to investment banking salaries. However, bonuses at hedge funds can scale up faster and are typically tied to fund performance, which introduces variability.
Potential Upside: Hedge funds often offer higher upside potential in bonuses, especially if the fund performs well. This could result in total compensation exceeding what you'd earn as a 3rd-year associate at a BB.
ECM-Specific Roles: If your role focuses on ECM-type deals (e.g., IPOs, primary and secondary offerings), the pay structure might align more closely with the fund's deal flow and success in these areas. While ECM roles at HFs are less common, they can still be lucrative if tied to strong fund performance.
Banking Comparison: As a 3rd-year associate at a BB, your total compensation (base + bonus) is likely in the $260k-$300k range. At a multi-strat HF, you could potentially earn more, but the variability in bonuses means there’s no guaranteed floor like in banking.
In summary, while the base salary might be similar, the bonus potential at a hedge fund could lead to higher overall compensation, albeit with more risk tied to fund performance. If you're comfortable with this variability and the role aligns with your career goals, it could be a strong move.
Sources: ECM, the high finance brain drain, https://www.wallstreetoasis.com/forum/investment-banking/should-i-stick-to-ecm-or-move-to-ma?customgpt=1, ECM Exit Opportunities, ECM, the high finance brain drain, EB Comparisons
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Depends on the fund. I have heard the pay is quite good and have some insight here. Feel free to dm.
Thanks, just DM’d
Can I also please DM you- grateful for any insights
What exactly does a EM associate do at a HF? I had heard they do some private investing...I had assumed it was just dumping IPOs like Figma and Circle at absurd valuations, and therefore really just relationship based (allocations). I would love to learn more about what an ECM association at a MM does
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