I’m trying to decide between an MM investment banking associate position and a hedge fund (>10bn) equity analyst position (post MBA).
The IB position salary is known but since hedge fund analyst salaries vary widely, I wasn’t sure what to expect.
Also how hard is it to go from a reputable MM IB position to buy side vs going from a HF analyst position but with slightly more questionable reputation?
I was at MS M&A post-MBA and it was really difficult to go to HF. Effectively, it's not an option you should count on. If HF is what you think you want to do, then you should just take this job regardless of pay (it will be comparable to banking for the most part until you get more senior and begin to see more deviation, but I don't work at a >$10bn fund).
What about going to a HF is hard?
For the same reason that it's hard to break into PE post-MBA. It's not as rigid as PE recruiting but the time to do it is early on in your career as an analyst. After that, it becomes a hard sell without connections.
Thanks. I definitely prefer HF but when I look at this specific fund, people who worked there previously don't seem to go on to work at the kinds of places I'd like to move to eventually. That's the only concern. When i look at people moving out of the IB I'm considering, there are lots of people working at PE funds (admittedly very few at HF).
Don't even focus on comp at all, decide on what you want to do. Do you want to be on the buy-side generating differentiated ideas in the public markets or do you want to be a deal-maker who builds relationships and tries to become a trusted advisor. The skill sets are very different and what makes a good banker doesn't necessarily make a good investor at the post-analyst level. I would say a plus 10bn AUM fund is a legit fund with enough scale to provide a good experience and a place to learn about investing without worrying about getting canned due to weak performance or outflows. Of course if you have no interest in equities than you might want to consider banking as it might open up doors to other strategies.
I would absolutely prefer to work at a HF on equities, so all things being equal I'd definitely prefer HF over IB any day. But what about the reputation of the firm? Does that matter?
HF salaries suck. Most pay between $100-200K regardless of seniority. Hedge fund comp all comes at year end
I can confirm. My PM was saying when he was at a Analyst at a large fundamental HF (long short value equity) when he was younger , base was $100-125k, with year end being the large payout (0-400k)
Yup, at many MM shops the gap between analyst and PM base is rather tiny. It’s all about the PnL you generate. However, the people that are serious about the field like it that way. Base isn’t supposed to get you rich.
The base seems to be around $150k these days. The bonus is supposed to be the bulk of the pay, but is usually arbitrary at junior levels and not tied to the fund or group performance in any explicit way. There is also a decent chance of being fired before the bonus time and getting only the base (dependent on the firm, but more common than it used to be).
Fired on what grounds? Sounds shady
Bad performance
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