Typical amount for Hedge fund severance?
Is there any severance involved when people get axed at hedge funds beyond mandatory comp during non-compete period?
Is it just "here is the door" or does there tend to be some sort of either (i) 1-6 months of salary severance or (ii) a partial payout of bonus? Does it differ by SM vs. MM?
I am a junior-mid level analyst at a multi-strat (non-MM) who is partially expecting the boot in next month as firm has started to exit my strategy so trying to figure out what market is.
Every decent fund will offer you a few months salary as severance (sometimes a formula like "2 months plus 1 month for each year you worked there" or something). They'll often also give you a partial bonus, but it depends on so many factors that it's impossible to predict what your number would be. And sometimes they may invoke your non-compete so that might get you another 6-12 months of severance.
In exchange for the severance, they will ask you to sign something promising not to sue them. You can try to negotiate an extra month or two of severance. You don't have a ton of leverage since they're firing you anyway; but it doesn't hurt to ask.
Thank you. It is a decent firm with a reasonably good culture so it sounds like I should be expecting 2-4 months plus potentially a portion of the bonus. For reference does this apply to MMs as well or do they tend to just kick people out?
It can apply to MMs.
In general, they want to avoid legal issues.
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