How big of a guarantee for senior associate?
I am a bit of a hermit when it comes to the guarantee gossip, but what is market deal/guarantee these days for someone in the following background:
4 years of MM HF experience (“senior associate” or “senior analyst” title), currently run small carve-out/in the process of scaling up next year and moving into more of a risk taking role, my coverage has contributed 80-100m of p&l since joining the team, comp has ranged from 500k-2m, solid reputation in my space
It would be helpful to hear what kinds of packages people at this stage are able to get (in terms of $ guarantee/sign-on and then the actual economics on a carve-out). Is LSD millions guarantee + 8% of p&l too high? Have there been cases higher than that?
Does it not make sense to leave now, considering next year will be my first year with proper economics on a bigger carve-out, meaning I could get a larger guarantee the year after that? Would appreciate any advice from older folks or those who are closer to the more recent guarantees!
Based on the most helpful WSO content, here's what you need to know about guarantees and compensation for someone in your position:
Market Guarantees for Senior Associates/Senior Analysts:
Higher Guarantees:
Timing Your Move:
Advice from WSO Threads:
In summary, LSD millions guarantee + 8% of P&L is not too high for someone with your background, but timing your move strategically could yield even better terms. If you're considering leaving, weigh the immediate package against the potential upside of staying another year to solidify your track record.
Sources: Negotiation for Guaranteed Promotion?, What I've Learned About Hedge Fund Structure and Compensation, Multistrategy / distressed credit compensation, Credit Hedge Fund opportunities, NYC MF Credit Associate Comp (recent data points, lateral move)
It kind of depends on the shop. If you're talking a smaller shop, they may not want to even give you a guarantee (i saw this last year). if it's another MMHF, then it depends...i've heard from recruiters that they'll pay you out for what you have in deferred plus a bit of a sweetener on top to incentivize the move, but nothing insane. so for example, if you generated $15mm on pnl in 2025, a MMHF may say:
I could see a scenario where a MMHF would say to you. "we're not giving you a guarantee as this role is a promotion and has more upward mobility (assuming that is true). Plus you already got paid for 2025 and you have most of 2026 to make money." Maybe they'll give you a guaranteed bonus for 2026 but it'll be small ($200-500k) to smooth cash flow over and make it less risky for you.
On the other hand, let's say it's the same candidate as above but they have $1.5mm in deferred comp tied up
When you hear about those big pay packages, it's usually the deferred being covered, not necessarily "free money" just to have you on their team (with the exception of the small guaranteed bonus i referenced above).
This has been my experience (approaching 10 years in MMHF land).
Someone with OP's profile and only 4 months of noncompete would be an anomaly these days. Most guys like that have 9-12m of noncompete, so add notice period and ramp up period, you probably have to guarantee them 12-15m of average bonus plus obviously cover their deferred.
Otherwise and unless their current employer is unwilling to match the promotion, there is no point in him jumping ship.
I've seen Baly in particular throw silly amounts of money at profiles like this. $2m definitely doable if you can persuade an up-n-coming PM to hire you.
How much would baly give someone with this profile / someone that’s not a PM but makes $15-30m of pnl / 1-3m comp managing a sleeve?
Can you clarify this? 12-15m for this profile with 12mo non compete?
That seems high my guess would be 2-6 guaranteed is market for this.
Sorry for the dumb question, current shmuck at a LO. Does deferred comp only carry through a single calendar year or can you defer over multiple years for tax purposes (e.g. harvest losses in a bad year for your PA after deferring for 2 years)? Does the other MM ask to see evidence of the magnitude of this deferred comp? If so, doesn’t your current employer get suspicious if you ask them to share proof?
This is absolutely wrong, the exact opposite of what has happened for guarantees for people in this level/notch below a PM - there has been massive inflation in comp/guarantee at the large MMs for L/S
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