Economics of a small HF (~100m)
How does the economics of a small HF work? Assume 1 junior analyst (1-2 years exp), 1 senior analyst (5+ years exp), 1 PM, and 1 CFO / COO. Say operating capital is provided by another fund that seeded this HF. Assuming a 1/15 structure, what would a bonus be for the junior analyst (say a 100-120k base?) if the fund is up 10%? Recently launched fund (
Incoming Analyst in Other, bummer your thread hasn't had a response yet. Sometimes bots are smarter than humans anyways:
Hope that helps.
Jr analyst would get roughly 5% of bonus pool, so around $75k. Absolute max would be 10%.
This structure will generate about 1MM in management fees and 1.3MM in performance fees. Therefore I think four staff is a lot should be two people. The CIO should make ~1.3MM, PM 600k, senior analyst 250k, junior analyst 80-100k, and there are other business costs. Therefore, if performance fees are $0, who doesn't get paid?
I think you misunderstood CFO for CIO. I think this is a reasonable comp structure.
PM - $1M+ CFO - $400k Sr. Analyst - $250k Analyst - $100k
Thats probably close to street at that size for total comp, with the excess flowing mostly to PM in good years.
I had interviewed with a $100m fund a while back as a junior analyst and asked for $100k base, which they said would be a stretch for them. Thats the only data point i have for that level of AUM as a junior.
Is that 100k base or base + bonus?
Very hard to tell at that level. All depends on how the PM views you and his generosity. I probably should have included a broader total comp range of $100-200k.
Coming from Undergrad and dont have any other offers with a PM that just raised the fund and isnt rich himself? Could be $70k + $20k
Currently a second year analyst at an EB moving to a small fund with a stable capital base, rich/generous PM who views you as a future partner to grow with? Maybe $125k+$125k.
The reason it is so variable at that level of fund is because the economics are such that any dollar you are being paid comes straight from your PMs pocket. So generosity, personal wealth and track record matter a lot, especially since some (or most) is his personal capital.
I dont know, I think i am skeptical of somebody getting paid too much at a fund like this, because clearly your not turning down offers at Lone Pine and the PM probably thinks hes doing you a favor just by giving you a ticket to the buyside.
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