Trending Content - Hedge Fund Forum
| +23 | % of pods making 9 figures consistently? | 29 | 9s |
| +9 | Fastest Way to MMHF? | 4 | 1h |
| +6 | Credit HF Guys: How much do you think abt "value" | 7 | 1d |
| +6 | Bad PM | 1 | 21h |
| +4 | Amakor Capital - Who are these guys? | 2 | 3d |
| +3 | culture at citadel macro | 1 | 6d |
| +3 | 4 YOE in ER & 30 years old | 5 | 1d |
| +2 | 2+1 -> Start-up -> Publics? | 1 | 6d |
| +2 | Walleye SA 2027 | 3 | 1d |
Career Resources
In theory no difference since you’re paid on the $ you generate and that’s transparent no matter where you are. In reality the biggest portfolios are run out of the US and funds in Asia tend to look at Asia or their respective geographies. Opportunity set for capital markets in Asia sucks vs the US.
Market Structure in Asia, from a deal flow perspective, is less cluttered but intensely competitive for the volume of risk. There is also some level of “uncorrelated returns” between Asia and rest of the world and in-fact within Asia as well. On scale, we will only be 10% of the head count of our US teams and 25% of the head count of our European colleagues.
In the end, the question is - is there Compensation parity - trying to draw parallels from whether U.S. and European analysts with similar P&L responsibilities get paid similar total compensation?
Or do firms consider differences in taxes, cost of living, and other regional factors. Someone told me they could also be considering replacement value in Europe (cost to hire similar resource from competitor) but asia has a smaller head count available (for more sophisticated strategies) so one would think that shouldn’t be the best approach to see “benchmark” regional compensation.
We, for reference, run better per analyst P&L compared to our US / EU colleagues today, and have a better trajectory (growth narrative etc.). However, we do understand we are developed market funds investing in developing markets so will be axed in both cases if the mother fund in its base geography does badly, or if our local geographies do badly (which is likely given higher theoretical VIX).
Fair question and can only speak from HF perspective which I think is what you’re asking anyway. Here’s my understanding:
At the pods, you’re definitely compensated similar amounts for the value you bring in (ie take rate on PnL). Realistically Singapore / HK / Tokyo are the only real places with presence. Tokyo definitely a little niche and siloed so don’t know about that. Pods don’t take into account cost of living or taxes or whatever. It would be crazy to pay someone in HK less because of lower taxes (note US ppl still pay US taxes in Asia so it just wouldn’t work. Everyone has different tax situations). Pods just don’t care about this. You get your base and everything else is dependent on how much pnl you bring and your cut on that. No difference anywhere you are.
But it sounds like what you’re referencing is more SM-like model. This is going to be different from fund to fund depending what your fund values. I would take a guess that despite running higher PnL per analyst, majority of your portfolio NAV is in US equities (assuming you cover equities). So majority of the portfolio risk is probably driven by US names. From a growth perspective, liquidity and opportunity set tends to be the highest in the US. So it’s very scalable and a very investable strategy to put resources into. Eventually you get a ton of operating leverage there since you can scale up positions with flat headcount. There’s only so big you can go in Asia equities for example. I would also assume that despite PnL per analyst being higher in Asia for your fund today, absolute dollars of PnL is higher in the US so that just is what the driver of decisions will be.
Bump
Once you're on a formulaic payout, it's all the same. Until then for junior employees with discretionary bonuses, it's US >>> Europe/Asia. Have worked in all 3 places.
Basis your experience can you share an indicative range of delta between the three geographies?
Asia and Europe about 30-40% lower than the US. Depending on your industry/role SG/HK is probably higher than continental Europe, but I think London tends to be higher for most roles. CoL and taxes are lower in SG/HK though, so your net take home is much better.
Dignissimos est amet quisquam possimus. Quisquam delectus et tenetur velit excepturi quod. Dignissimos dolor ipsam omnis sequi iusto sequi. Sed enim ut eos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...